Equipment Financing – The Best Business Loan Options SHARE Share on facebook Share on twitter Share on linkedin What is Equipment Financing? Equipment financing is
The Ins and Outs of Commercial Truck Financing
Affording a commercial truck for your business can be quite expensive. You may need one to transport products and goods or to make deliveries. A commercial truck loan can help cover some of the burdensome costs associated with the trucking industry and equipment.
With truck financing the lender keeps the title of the truck until the loan is paid. These contracts are usually good for 5 years. The financing rates vary based on the individuals credit but start as low as 4.95%.
When considering whether truck and equipment financing is fiscally possible for your company also keep in mind the cost of maintaining the truck(s). You will have to put out money for oil changes, tire changes, and general maintenance, which can be costly for such large vehicles. Your company should typically be pulling in 100K in revenue annually.
The process for applying for a truck loan can be an extensive one. First thing that lenders will evaluate is your personal and business credit history. You should typically have a credit score of 550+ before considering semi-truck financing. However you can still get approved with lower credit scores, but the financing rate will be higher and the terms may be shorter. Be prepared to provide financial statements and tax returns. The amount of time your business has been up and running will also be something lenders will take into account. The longer that your company has been operating, the more likely they will be to work with you.
You will also need a commercial truck license and proof of insurance in order to apply for commercial truck financing. The quality and type of truck is also important when applying. Many lenders will want to know information on the truck such as the year and model, mileage, condition and repair history. Newer trucks and lower mileage equates to less of a risk for the lender.
Now that you’re ready to apply, where should you go? You can obtain truck financing through banks, trucking finance companies, or alternative lenders. The strictest requirements will come from banks. You will have to have a good credit standing in order to qualify. Banks also typically require the most amount of financial information and prefer businesses with longevity. Trucking finance companies are also a strict and don’t usually accept underqualified applicants because they work directly in the trucking industry and receive a copious amount of applicants on a regular basis. Alternative lending is any lending that occurs outside of a traditional bank or financial institution. For your greatest chance at guaranteed semi-truck financing this is the best option for newer businesses or businesses with low credit scores.
While the process may seem overwhelming, the purchase of a semi-truck can be a pivotal point in increasing your business’ revenue and work volume. Upwise Capital accepts applicants from a broad range of companies. We encourage new companies to apply, and only require you to be in business six months. We also offer terms ranging from 1-8 years, while most equipment financing lenders offer 5 years maximum.
Upwise Capital offers traditional equipment financing, but also working capital, lines of credit and collateralized loans, all of which can you help you finance your truck or new piece of equipment. When applying with Upwise Capital we will help you decide which options best suits your business needs. Let’s get you on the road!
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