If your business requires a truck to get the job done, you may need to finance one. Like many other types of financing, the rate you pay on a commercial truck loan depends on your credit history and financial profile. However, a commercial truck loan is often more accessible than other types of loans because it involves using the vehicle as collateral to secure a loan.
How to Find a Loan
Financing for trucks can be a complex process, but it is not impossible to find a lender that will approve your loan application. To make the process as smooth as possible, you should have all of your paperwork in order before visiting a dealership or lender.
You should also check out their financing terms and rates to ensure you are getting the best deal for your money. If you aren’t sure where to start, consider enlisting the help of a reputable and knowledgeable trucking finance professional who can guide you through the process.
Your credit score: The credit history you have plays a major role in your eligibility for a commercial truck loan. A high credit score can increase your chances of getting approved for the loan you need and at a competitive interest rate.
Time in Business: The longer you have been in business, the more likely you are to get a good loan. This is because lenders believe that a business with strong cash flow and a long track record of success will be more successful in repaying the loan than a new business starting out with little financial experience.
Down payment: The down payment you put down on a commercial finance truck purchase is a key factor in the overall cost of the vehicle and will affect your loan repayment terms. Ideally, you want to have between 10% and 25% of the cost of the truck in cash on hand before signing on the dotted line.
Repayment terms: The term of your commercial truck loan will vary by lender and will typically align with the truck’s expected lifespan, but most lenders cap their term at 10 years or less.
Where to Go for a Truck Loan
There are several places you can turn when seeking a commercial truck loan, including traditional banks, online lending companies and alternative lenders. Alternative lenders have a simplified application process and potentially higher approval rates, but they can also charge higher interest rates.
Wells Fargo: This lender offers both loans and leases for commercial vehicles, such as semi trucks. The company requires a minimum of three years in business, a strong credit history and positive cash flow to qualify for its financing.
Commercial Fleet Financing: CFF has been in business for 25 years, offering loans for semi trucks and trailers. They say they can make credit decisions within two hours and fund within 24 hours.
Truck Lenders USA: This company has been in business since 1977 and provides loans for all types of trucks. They offer flexible loan options, ranging from $7,000 to $150,000.