A garbage truck, whether a rear, side or front loader, is usually financed with a chattel mortgage covering the truck and compaction body. You own it from settlement, secure the loan against it and repay over one to seven years with an optional balloon. Because the hydraulic compaction gear adds value and sees hard use, lenders assess it closely. Overdrive compares 80+ banks and non-bank lenders to structure finance around your collection contracts.
Funding a compaction unit
Garbage trucks carry specialised compaction bodies, whether rear, side or front loaders, along with hydraulic packers and bin lifters that add significant value and see constant use. Operators generally fund the complete unit with a chattel mortgage, owning it from settlement, securing the loan against it and repaying over one to seven years. A balloon can lower monthly repayments. Waste collection often runs on multi-year council or commercial contracts, which supports predictable finance. Because the compaction gear is specialised and works hard, lenders pay attention to its condition, so a well-maintained unit backed by a contract supports a stronger offer when you compare lenders.
What lenders assess
Lenders look at the truck and the compaction body together. For the body, they consider the packer and hydraulics, bin-lifter condition, capacity and service history, since this gear is central to the truck's value and reliability. For the truck, age and kilometres matter. On the business side, they review your ABN and GST registration, time in waste services, any council or commercial collection contracts, and your credit history. A signed contract strengthens the application considerably. Established operators may access low-doc finance, while newer businesses often benefit from a contract, a deposit or added security to help secure approval and a better rate, subject to lender criteria.
Structure and repayments
Waste contracts tend to provide steady, contracted income, which suits regular monthly repayments, though weekly or fortnightly may work better for cash flow. A balloon of 20 to 40 per cent lowers your monthly outlay and preserves working capital for maintenance, which is significant on hard-working compaction gear. No deposit is common for strong applicants, while a deposit or trade reduces the amount financed and can sharpen the rate. Budget for hydraulic and packer servicing. Indicative rates start from around 7.20% p.a. for strong, asset-backed deals; older trucks, older bodies or weaker credit are priced higher, subject to lender assessment.
Getting pre-approved
Winning a new waste contract often means having a truck ready to roll, so pre-approval helps you gear up quickly. It sets your budget and lets you negotiate as a cash buyer at a dealer, ex-fleet sale or auction. Have your ABN, GST and licence details, your collection contracts, and recent bank statements ready. A broker lodges one application and compares lenders behind the scenes, matching you to one comfortable with compaction units. For eligible applicants, same-day pre-approval and 24 to 48 hour settlement may be available, so you can mobilise for the contract without delay.
Gearing up for a waste contract? Simon Kendrick at Overdrive can compare 80+ lenders, fund the truck and compaction body together and structure repayments around your collection income. Request a free quote for an indicative rate and pre-approval.
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