You’ve done it! After much hard work, you’ve decided to become your own owner/operator. But as you start to look through all the necessary steps to get going, you realize you’ll need semi truck financing.
“There’s got to be a good way to do this,” you think. “But how?” If you’ve considered buying your own semi truck but need a financing guide, look no further. Below is the beginners guide to semi truck financing.
Are You Interested in Semi-Truck Financing?
Research what you can afford first.
Not a Car Loan
Have you ever heard those great car financing ads on the radio? Of course, you have. They reeve you up so well you think you could drive off the lot with anything. And you might with some dealers. But semi truck financing is not a car loan. You can’t just stroll up to a truck dealer and expect to get a good deal. You have to put in some research first. Research like:
- The payments you can afford
- What you’re willing to put down
- The commercial truck you want
- Financiers
NOTE: You can’t predict your interest rate. You can have a pretty good idea, but unless you speak to an adviser, you won’t know for sure. So don’t walk onto a truck lot assuming you’ll know your rates.
Don’t Worry About Your Credit Score
This sounds crazy, right? How can you not worry about your credit score? It’s what everyone stresses about!
Here’s the truth:
Credit scores are not the only factors financiers look at. When a financier considers you for a loan they may also look at:
- How long you’ve been in business
- The truck you’re considering
- Current earnings/cash flow
- Business plan
This isn’t to say that credit scores don’t matter. They do. But your credit history won’t stop from you from getting financing.
“Okay, so what if I have bad credit? What then?”
Your semi truck financier will look into other aspects of your business to assess the loan. And if you’re still worried about your credit score, there is something you can do.
Get the Financing You Need
Leasing can help you build your credit and a relationship with a financier.
Consider Leasing
If we’ve mentioned leasing a lot, there’s a good reason. It can help you build your credit and build a relationship with a reputable lender. How? Say you get a gas credit card. The limit is so low that it only covers the gas you buy. As you make payments on that credit card the credit world sees that:
- You’re earning enough to make payments
- You’re responsible enough to make payments
Leasing a semi-truck works the same way with an added bonus. Not only are you proving that you can make payments, but you’re also building a relationship with a financier. When you’re ready to finance a commercial truck instead of lease you’ll already know who to finance with. And they’ll already know you, meaning they’ll be able to craft a financing plan that works with you and your budget.
Make It Official
This is super important. If you are just starting out you need to register your business ASAP. This does two things. First, it gets you set up as a business entity, and second, it shows you mean business-literally. Financiers and banks want to work with businesses. If you come in as a person instead of a business they’ll assume you’re not serious. You know you are. Your business partners know you are.
But to them, you’re one person wanting money and that’s a risk. But if you come in with proof that you’re a business they’ll see you’re ready.
Work with financiers who know your industry.
Work With Semi Truck Financiers
One of the best things you can do to ensure financing is to work with truck financiers. Why? Because they will know the industry and its risks. No one is saying you can’t finance with a bank. If you know your bank will finance you at rates you can afford, great! But most banks won’t.
All banks want is a reason to say no.
If they can find any reason to decide against your loan or financing, they’ll do it. It’s like Hollywood and remakes. Hollywood loves to remake movies over making new ones because there’s already an audience. On opening weekend it’s guaranteed that people will buy tickets.
Banks are the same way. They’ll only finance business types they’ve financed before because it’s guaranteed they’ll make their money back. That’s why you have to work with financiers who know semi trucks. Not only are they more willing to finance new businesses, they know the risks. So when they look at the financing you want they’ll be able to craft a plan that works for you.
Don’t Rush
Looking at semi trucks is exciting. You see all the possibilities and you can’t wait to get started. But before you jump the gun, take some time to think things over. Really weigh the pluses and minuses to trucks and financiers you’re looking at.
You could finance the latest truck only to find out it doesn’t handle as the older models do. Or you could finance something inexpensive and later discover it doesn’t have all you need. So don’t rush into anything. Take the time to let all your research sink in. You might realize that there are certain options you can’t live without. Or you may realize you can make do with less. The important thing is that you’re taking the time to consider everything. If after a few days what you had hasn’t changed, you can charge ahead.
Get Semi Truck Financing From First Capital Business Finance!
The only sure way to know what type of semi truck financing you can expect is to speak with the financial experts at First Capital Business Finance. It just takes a few minutes to get pre-qualified over the phone! Ready to start your fleet of semi-trucks? Simply call us at 888-565-6692 or click below to finance your future.
The Beginner’s Guide to Semi Truck Financing | First Capital Business Finance
