A commercial trucking business involves transporting goods to different locations. You’ll need big rigs to keep running the business and generate more revenue. The number of trucks required depends on your business’s size and how many clients you intend to work with.
If you are in the market for big rig lending, Your Finance Partners can help make the process quick and painless and choose the right finance options for your business. Your Finance Partners have the expertise to guide you through the process and help your business grow.
How it Works
Acquiring a commercial truck loan can help you expand your business or conserve cash flow. How it works is — a commercial lender can extend the loan to help you purchase big rigs, but the truck serves as your collateral. Should you run out of money to pay for your loan, the lender reserves the right to seize your vehicle.
Just like other commercial loans, you will need to meet all the requirements required by the lender. Having a good credit score can also significantly help you get approval. The higher your credit score, the more likely you are to get approved with lower interest rates.
Upon submission of the docs, the lender reviews your application, including the business’ financial statements. They may also check the value of the truck, company, and ownership history, as well as your current income situation.
While it’s ideal for applying to banks, they may not be the best option, especially for those who want to get quick approval. Banks take several weeks to approve commercial loans, but thankfully there are other options available for you.
So long as you meet the criteria, private lenders can extend the commercial truck loans with quick approvals. Make sure you review all the documents needed and, if possible, consult with a professional to ensure that you get approved.
Tips for Faster Big Rig Lending Approval
As soon as you decide what truck to purchase for your business, ensure that you have all the documentation needed for the application to increase your chances of getting approval.
Below are some tips to help you:
Find a Reputable Big Rig Lender
Your Finance Partners will help you choose the big rig loan that is best for what you need. These professionals know the differences between different lenders. For example, when you go with banks, the processing of your commercial loan could take several weeks, whereas, with a private lender, it may only take as little as 48 hours. So long as you have all the documentation needed, you should get quick approval from a private lender.
Work on Your Credit Score
Remember that you’re acquiring a commercial loan, and one of the requirements is to have good credit scores. As much as possible, check your credit scores beforehand, so you have enough time to settle any disputes or other issues with your credit scores. Look for ways to improve your credit score to increase your chances of getting approval from a lender.
Also — it’s imperative to have a good credit score to help you get a lower interest rate for your big rig loan. Borrowers with not-so-good credit loans may still get approved (depending on the lender) but with higher interest rates since they are considered “high risk.”
Gather Relevant Information About Your Business
You may need some financial information about your business and how long you have been in operation. Ideally, you should be operating for at least two years. Don’t get discouraged if you’re still a startup; while established businesses are likely to get approved, that doesn’t mean that new businesses don’t get approval for the loan. Do make sure you have the other documents with you upon application.
Prepare a Downpayment
Ensure that you have the required downpayment and maybe more. It wouldn’t hurt to provide proof that you have working capital to cover the loan payment and repair in case of emergency.
Also, you may have to get truck insurance as that would assure the lender that in case there are accidents, they will get compensation for it.
Semi Truck Financing
The trucking industry has in recent years been seeing an increase in growth and truckers all over will have the potential to see a significant economic gain if they are able to own their own truck. In being an owner, they will be able to create equity without making payments that they will never see again. Instead, the payments go towards what they will end up owning after all the payments end. It is estimated that with semi truck financing, you will be able to pay off your loan in 5-7 years, however your rig will last much longer than that, at least 15 years. This means that eight to ten years worth of work will just go towards profit without having to make a payment again. After 15 years, you could still sell your rig for anywhere from 15 thousand to 100 thousand. It would be wise to then sell and upgrade. In the long run, owning something at the end of the payments is always worth it to have something that holds value, however every person’s situation is unique and different. Here are some things to consider before buying.
Benefits to semi truck financing
- Gaining equity
- Investing in something that holds value
- Will have an asset at the end of making payments
- If something does not go right, you can sell
Things to consider before financing a semi truck
- Do you have enough money up front
- Do you have good enough credit for a great rate
- Is your trucking job stable
- Do you plan to keep your trucking job for at least the amount of time it takes to pay of the loan
Lending Vs Financing
There are pros and cons to both financing and lending. It is important to understand the difference between the two, because depending on the situation you are in, one option will be better suited for you.
Is Big Rig Lending Right For Me?
If you intend to grow your business with one or multiple big rigs, and are confident you have the resources to attract and retain clients, then we recommend that you consider getting a commercial truck loan to help with purchase costs. However, you do need to evaluate your business’ financial situation first. Your Finance Partners can help you assess which loans would best grow your business through acquiring big rigs. Take the stress out of business finance, and contact Your Finance Partners today.