Commercial Truck Loans
If you are in any business that requires a commercial truck and are weighing the option to either own or loan your vehicle, thorough research is imperative to the success of your business. If not done right, it can prove to be costly without a significant capital investment. Finding the right finance partner is possibly the most important aspect of ensuring your business prosperity. In this article, we will discuss:
- What are commercial trucks?
- Difference between financing and lending
- Food truck financing
- Big rig lending
- Finding the right finance partner
What are Commercial Trucks?
Commercial trucks cannot be categorized as one specific type of truck but refer to trucks that are used for various commercial or business purposes. Vehicles that are used by businesses in the day-to-day course of their work, or used to carry commercial goods, inventory or to deliver commercial services, is known as a commercial truck.
What is the difference between financing and lending?
Financing
- A financial loan to a business for the purposes of buying assets the business may need
- Paid back over an agreed period
- Once the loan is paid off the business fully owns the asset
Ownership of your own assets gives you a competitive advantage in whichever industry you may be in.
Lending
- Renting an asset in return for monthly payments
- The lease agreement is over an allocated time frame, typically one to three years, but can be flexible.
- No ownership at the end of the agreement
This is an option to consider if you have been struggling to get approval for a substantial loan amount, or if you do not want to worry about depreciating the assets of vehicles.
Food Truck Financing
A business trend that has grown exponentially in the past five years is food trucks, influenced by the significant surge in gastronomy in the United States.
Financers have differing criteria to qualifying businesses for loans but there are some universal guiding principles, such as:
- The business should have been operating for a minimum of 6 months
- Should have a minimum monthly revenue of $10,000 or more
In some instances, particularly if your credit score does not meet the minimum requirement, between 550 and 640 as a minimum, you may need to provide cash or some form of collateral for a down payment. Alternatively, you could get a co-signer with good credit.
Should you have good credit, however, you may be required for a down payment of 5-20% of the loan amount.
Bad credit may not hinder you from getting financing for your food truck, though, you will be offered lower fees the higher your credit score is.
Building a good credit score is vital and if you can delay requesting finance to fix it, you will qualify for more manageable payment terms.
- Do thorough research on the various options available for financing your food truck
- Get quotations from various financing companies before settling for a deal
- Include all the expenses you’ll need to cover with your loan
- Consider padding your loans with a little extra in the event of unforeseen costs or emergencies.
Big Rig Lending
There are over half a million trucking companies in the United States, the trucking industry has grown exponentially in the last couple of years. If you have a trucking company, it goes without saying that you should familiarize yourself with big rig lending, and how it can work for you.
Big Rig lending typically consists of:
- The use of a truck that they’re investing in as collateral for the loan.
- A big rig is provided to a business for a specific objective or purpose, which is payable after a specified lending period.
- The key objective for the lending is so the business can have access to the truck without the cost of buying it.
The benefits of lending a big rig are:
- You can trade in the initial model for an upgrade
- You don’t have to worry about maintenance, if you find the right leasing partner, they can provide it for you. If you have bad credit, you may not be eligible for a commercial trucking loan
- Unlike a commercial trucking loan, you do not have to put down as large of a down payment
- You have options to expand on the services you provide to your current customers
Finding the Right Finance Partner
Before settling for any option, it is of utmost importance to do research and ask relevant questions.
- Which option better suits your business’s needs?
- Will you be able to afford to repay the loan or lending installments?
- Can your business survive without it?
If you have done your research and are looking to expand and just need extra liquidity to fulfill instant equipment payments then contact a company that has good reviews, history and connects your business to the financial lending institutions.
How to Apply?
Applying for commercial truck loans is a simple 3-step process:
- Simply fill out a form to contact our consultants.
- They will contact you to retrieve essential business information.
- We connect you to suitable lenders with the lowest premiums and guide you through the process.
Ready to Grow Your Business?
Take the first step towards securing the financing you need with Your Finance Partners.
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