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The Ultimate Guide to Trailer Financing

The Ultimate Guide to Trailer Financing



Trucking can be a profitable business to get into — but getting started in this industry?

That takes resources.

Financing and funding to kickstart or expand your trailer business ought to play a central role in your strategy.

Prior to making a decision, know that buying tractor-trailers are expensive. Manning, equipping, and maintaining an entire fleet of them can be difficult, especially when you’re just starting out.

Fortunately, there are designated truck, trailer, and equipment financing options that can help. With trailer financing, you better manage these costs and get the cash flow you need to keep your business profitable.

Do you want to learn more about financing your fleet’s tractor-trailers?

Then this guide can help.

Financial Impact: Did you know the average cost of a new semi-truck ranges from $100,000 to $200,000, making financing a critical aspect of purchasing such expensive assets? Financing terms and interest rates significantly impact the total cost of ownership for semi-truck operators. (Source:

Semi-Trucks vs. Trailers: What’s the Difference

First, it’s essential to know the difference between semi-trucks and trailers. Before you start seeking financing, you’ll come across options for each.

To be clear, a semi-truck is only the front, engine-bearing part of the vehicle. It accounts for just one portion of the overall rig you’ll need to run a transport company.

The trailer, on the other hand, is the back-end of the rig — the area where you’ll store the goods you’re transporting.

Together, these make up a tractor-trailer or, as many call it, an “18 wheeler.”

You’ll need to look for tractor-trailer financing if you want to purchase full-size rigs for your fleet.

How to Get Trailer Financing

Not all financial institutions offer tractor-trailer financing, so you’ll most likely need to look beyond your existing bank for options.

Your best bet is a designated business and equipment lender — one that specializes in loans for business owners and entrepreneurs like yourself.

If you use the right lender, you’ll likely have access to several different financing options. These include: lines of credit, title loans, invoice factoring, and cash advances.

These can help you finance the initial purchase of your tractor-trailers, as well as make repairs, maintain your fleet, or even access extra cash flow later on.

What Could Prevent You from Getting Trailer Truck Financing

cartoon truck with delivery and two hands shaking

Some trailer financing lenders have strict guidelines for qualifying borrowers. And without perfect credit or a long history of sales, you could have trouble getting a loan.

Here are just a few of the items that could hold you back from getting financing for your fleet:

A lack of business history

Start-ups and new companies have it particularly hard when it comes to securing financing — and that’s true even outside the transportation industry.

Generally, lenders want to see a solid history of sales, invoices, and tax returns before they’re willing to take the risk of a business.

 In fact, most want at least two years of operating history.

Fortunately, if you’re a start-up, you’re not totally without options. You can choose to:

  • Prove your experience in other ways (show business income from a past company you started, for example)
  • Put down a larger down payment (this lessens the lender’s risk in borrowing to you)
  • Or choose a lender who doesn’t have such stringent borrowing standards

If you have purchase orders, contractors, or other commitments for sales ahead of your business’ launch, these can also help your case with a lender.

A poor quality tractor-trailer

Lenders want to know they’re backing a vehicle that’s primed for long-term success and profits (so you can continue making your payments).

For these reasons, they’re much less likely to finance a poor quality or older trailer than they are a brand new one.

 They also may be hesitant to loan you funds if you’re buying the trailer from a private or unknown party — someone they can’t verify the credentials of.

If you really want to increase your chances of getting financing, you’ll want to purchase a newer truck (at least younger than ten years) with low mileage. And do so from a reputable business or dealership.

Generally, the more documentation a dealer and truck have, the better your financing chances are in the long run.

Not having great credit

Bad Credit Loan Rejected for trailer financing

Credit is the No. 1 item most lenders look at when considering a new loan.

That’s true of mortgages, car loans, and even in equipment and trailer financing. In fact, most lenders in this industry want to see at least a 600 score or higher.

Fortunately, everyone’s entitled to a free credit report from all three credit bureaus. With  Experian, TransUnion, and Equifax every year it’s easy to pull yours and see where you stand.

If your credit isn’t great, you can improve it by paying down debts, notifying the bureaus of any errors on your reports, and settling any collections or overdue accounts. You could also consider a secured credit card or becoming an authorized user on another cardholder’s account to help boost your score.

Furthermore, you could improve your chances by using a cosigner on your loan (choose one with a solid credit profile). Another option is to opt for a trailer and equipment lender who doesn’t require stellar credit.

If you choose the right provider for your trailer financing, bad credit doesn’t have to be a deal-breaker (and we should know!).

Being low on cash

trailer financing cash

As they say, “It takes money to make money,” and that’s certainly true with most lenders.

In general, a lender will want to see a certain amount of cash reserves in your accounts — money that can be easily used to cover your loan payments should your business or finances head south.

For the most part, you can expect to need at least a few months of payments in reserves in order to qualify, though there are some lenders (First Capital Business Finance included) who don’t have such requirements.

With these financing options, you’ll simply need to show how the trailer you’re financing will help improve your cash flow and thus ensure on-time monthly payments.

Past financial mistakes

Bankruptcies, late payments, foreclosures, and other financial mistakes can all be red flags for lenders, and in some cases, they may preclude you from securing financing for your trucks, trailers, and equipment.

If you have negative marks on your record, you may be best served by delaying your financing application until some time has passed. This will allow your credit score to bounce back and give you time to show lenders your responsible financial habits.

There are also lenders who are more lenient when it comes to these financial missteps.

For example, at First Capital Business Finance, we can provide trailer financing to borrowers who have:

  • Recent bankruptcies
  • Low credit scores
  • No cash reserves
  • No down payment
  • Or slow-to-move customers and payments

If you have any of these marks on your profile, just do your research and find a lender who can think outside the box and find other ways to qualify you for your loan.

Not having a CDL

By and large, most tractor-trailer lenders will require you to have a commercial driver’s license (CDL) before they approve your loan. This is because they want to ensure the truck will be used for consistent income once it’s financed.

As with the other hurdles on this list, though, there are some financing options that offer exceptions to this rule. Talk to a representative at First Capital Business Finance to learn more now.

How to Qualify for Trailer Truck Financing

At First Capital Business Finance, we offer a wide range of trailer financing options to fit every credit profile and budget.

Whether you have a sizeable down payment and great credit or a small one and no credit at all, we have financing plans that can help you get the equipment and cash you need to be successful.

At a minimum, here’s what you’ll need to qualify for tractor-trailer financing with us:

  • Down payment: At least one month down
  • Credit score: No minimum credit score on some programs
  • Business history: No experience needed on some programs
  • Vehicle mileage:  No mileage requirements on some programs
  • CDL: No CDL required on some programs

You’ll find that our financing options come with significantly less stringent qualifying standards than other lenders out there.

Best of all, our loans go up to $200,000 and are available to both start-up companies and existing businesses, so whatever your experience, cash flow, and current fleet size is, First Capital Business Finance has a trailer financing program that can help.

Can You Get an Equipment Financing With Bad Credit?

With First Capital Business Finance, yes, you can.

You need not worry about your less-than-perfect credit score to get financing. The company offers a wide range of business loans for trailer owners who want to start anew.

Even if you’ve had a bankruptcy recently discharges, our Asset-Based Direct Lease program is a great alternative.

With a simple, fast pre-approval process for bad credit, we finance, both new and used trucks and trailers.

Also, for business owners who have been in the industry for 5+ years, the “corporate only” financing process offers by First Capital Business Finance is fast and straightforward.

More Tips for Success

If you’re looking to finance your fleet expansion, working with an experienced lender in equipment and trailer financing can help the process go faster (and more smoothly).

You can also help streamline things by gathering the appropriate paperwork early before applying for your loan.

Specifically, you’ll want to gather up any of the available documents:

  • Your business licenses, certifications, and incorporation documents
  • Recent bank statements
  • Recent tax returns
  • Any balance sheets and profit-and-loss statements you have for your business
  • Your CDL, motor carrier, and USDOT information

An experienced tractor-trailer lender can finalize your loan within just a few days. This allows you to get the truck set up, running, and generating income before your first payment becomes due.

Need Tractor-trailer Financing?

If you’re looking to purchase a trailer or expand your fleet, First Capital Business Finance is here to help. Contact us today to learn about our flexible truck, trailer, and equipment financing options or to apply for your loan now.

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