If you are in the trucking business and have decided to make the transition from steering the truck to steering the company, now more than ever is the best time to consider how to start financing your new trucking business. Although it may seem almost impossible, especially if you are working with limited to no initial financing, that doesn’t have to be the case. Seek Capital is here to help you weed out all the information out there so you can decide how to make the best financial decisions possible for financing your commercial truck business.
Don’t let the information overload out there be a flat tire on your journey to better financing. Check out our ultimate guide below on how you can start financing your commercial truck business.
Knowing Your Credit Options
Before you decide on which financing you choose for your commercial truck business, the first and most important thing you need to know is the shape of your credit. Even if you have less than satisfactory credit, there are still plenty of financing options out there for you. Check out the following types of credit and what it can mean for your financing:
- Putting 0$ down – if you are just starting your new truck business and don’t have anything to put down, no money down is right for you. You can either lease or finance your commercial vehicle instead.
- Bad credit – bad credit is not a financing deal breaker, contrary to popular belief. This means you will have to work harder to find a bank that will lend to you. You can find commercial truck lenders that specialize in truck businesses with owners who have less than stellar credit.
- Fair credit – if you are more middle of the road with your credit score, you can also still get financing. For example, if you’re around the 600 range and have experience with truck operating, you will still look good to lenders. Truck loans and capital leases will also be more available to you with this credit condition.
- Excellent credit – as everyone knows, having good to excellent credit will always get your financing approved. You should also be mindful that good credit alone isn’t enough and lenders will also want to take it into serious consideration if you have a higher credit score (740+), three to five years of operating history, and no delinquencies.
Now that you understand what your potential financing options could be with your credit history, let’s focus on the different types of commercial truck businesses you will need to know to find the right financing for your business.
Also see: Causes of Commercial Truck Accident
Types of Commercial Truck Businesses Financing Options
Now that you understand what your financing outlook will be like with your credit history, let’s turn our focus to the different types of commercial truck businesses. The following are the most common types of commercial truck businesses and loans to consider:
Startups
The one drawback to a startup is that you typically have little to no capital when it comes to applying for financing. Even if you have a generous lender recommended by a friend or even an angel investor, sometimes that isn’t enough to help you get off the ground. Instead of other lenders and angel investors, consider researching a company that has a specialty in truck equipment financing and startups in general.
Seek Capital, for example, is great to use because they help you with financing on a personal level and can assist with your unique financing needs. Seek Capital helps with getting your new company pre-qualified for up to $500,000.00 within minutes, which can help you get on the ground running with your business. In addition to the quick financing, lenders like Seek Capital can create a personalized plan of services with you so you are getting your entrepreneur needs to be met on your terms.
Fleets and Semi-Trucks
If you aren’t new to the commercial trucking business, you probably are already operating fleets of semi-trucks at this point in your business. The size of your fleet can affect your ability to be approved for a loan but in the best way possible. If you’ve financed your trucks in the past and have a good repayment history, this means you are more likely to get financing again. For loans, the best for fleets will be operating leases, because it gives you access to new trucks every year.
On the other hand, semi-trucks typically have their type of category of financing because of the risks involved with heavier freight and the long distances. In these cases, lenders will use the truck as loan collateral and a truck appraisal before offering the loan.
Choosing the Best for You
Now that you know the different types of loan options out there for your credit history and the different types of loans that can be offered for your commercial trucking business, you can now go in confidence when it comes to financing your business. To recap, consider the following when doing your research on loans and choosing the best lender:
- No credit or great credit, you can still get financing no matter where your score lands.
- Understand the type of commercial truck business that you are operating because it comes with its pros and cons when it comes to financing your business.