What Are The Semi Truck Financing Requirements That You Need To Qualify?
Is it time to grow your transportation business? Semi truck financing can help you reach your goals. The right loan or lease makes it easy to get the trucks and equipment you need. What are the requirements?
The specific semi truck financing requirements depend on whether you’re applying for commercial truck financing, a title loan, or a lease. For success, plan on six essentials.
1. Down Payment
Most semi truck financing requires you to make a down payment. This varies from 2.5–10% down on average. Some options allow borrowers to save money on fees/interest and get a larger financing amount by making a 40–50% down payment.
Generally speaking, the higher the down payment, the more favorable the loan terms in the long run. That said, if you prefer to keep more money in savings for a rainy day, there’s nothing wrong with choosing a 2.5% or 5% down payment.
2. Time in Business
Experience owning a business isn’t a definite requirement, but it does make qualifying faster and easier. To get the best terms on semi truck financing, you should aim for a couple of years of operating.
3. Commercial Driver’s License
If you’re an owner-operator, provide a copy of your CDL with the application. If you run a commercial transport fleet, show basic business documentation instead, such as your proof of fleet. These documents show that you’re serious about running your company and the stability of your company.
4. Semi Truck Information
This is one of the main requirements for loan approval. Semi truck financing requirements use the truck you’re going to purchase as collateral. To determine how much capital we can lend you, we need to know the semi truck’s value. If you don’t know the value, we’ll have our asset desk run some figures to get an idea.
Detailed information helps us approve the loan and provide the funding to the seller a lot faster. Ensure documents include the type of truck, such as heavy-duty tractor and trailer, tractor only, flatbed truck, box truck, or medium-duty commercial truck. Providing the invoice or the weblink to the listing would be a great idea if you can provide that.
5. Truck History
Are you interested in buying a used tractor and trailer? We can work with that. Ensure to ask the vendor for documents related to repair work done on the truck and the number of miles.
What Aren’t Things Required for Commercial Truck Financing?
The truth is that getting semi truck financing is a lot easier than other types of business loans. Here are a few of the things you don’t have to worry about:
Cash flow statement: We don’t require financial reports for your business. Market conditions change quickly when you’re on the road, so your cash flow may be slow for some months. That doesn’t prevent you from qualifying for commercial truck financing.
Tax returns: Don’t worry about submitting any personal or business tax documentation. Majority of the time it’s not needed.
A certain number of years driving: We don’t require a minimum number of years with your CDL or a spotless driving record. From our point of view, those things are none of our business. However, it’ll depend on which program you are trying to qualify for.
Financial history: Many small businesses have their ups and downs financially. What matters is that you have enough capital for a down payment right now, not what happened years ago.
How Important Is a Great Credit Score As A Semi Truck Financing Requirements?
Your credit score is important, but it doesn’t affect your ability to qualify for semi truck financing. You can get a loan or lease for your transportation business even if you’ve gone through bankruptcy in the past. A low credit score isn’t an obstacle so that startups can get financing, too.
Of course, if you have fair credit (around 600), your business does benefit. You can get better pricing, larger loan-to-value ratios, and more comfortable terms. Some offer 0% down payments if the business qualifies.
How Can New Owner-Operators Get Started With Semi Truck Financing Requirements?
Our commercial truck financing is so simple that even startups can qualify. If you have been in business for a few months, and if you can provide proof of income for the last 3 months you might qualify for some additional working capital. Same goes if you have a truck, trailer or other heavy equipment that is free and clear of any liens. If you can provide proof of income for the last 3 months you can get some additional working capital or you can pledge your equipment to buy additional equipment. Another option is to go with semi truck leasing. This offers lower monthly payments that can benefit new business owners and help you build up your capital.
The point is that just because you’ve been turned down in the past for other types of business loans, you shouldn’t let that stop you. We’ve helped many small business owners and owner-operators get a state-of-the-art semi truck with our easy-to-use loans.
To apply for semi truck financing or learn more, contact our First Capital Business Finance team right away.
What Are The Semi Truck Financing Requirements? | First Capital Business Finance
First Capital Business Finance is committed to helping you meet your cash flow needs to grow your business. We serve small and middle market businesses and large corporations with range of loan and financing options