Are you a trucking company that is worrying to close soon due to growing debts and unpaid truck loans? We can feel your fears and sentiments.
We know that it is difficult to run a trucking business and purchase additional in house semi truck and trailer financing, without a stable amount of cash on hand. You need to pay bills, rent, utilities, people and other unforeseen expenses. What to do if you want to add more trucks and trailers when you don’t have cash to purchase new trucks outright?
It may be hard for startup truck operators and trucking companies to operate and grow their business when they don’t have enough cash. What’s even harder is that it is not easy to apply for loans through banks and factoring companies with a bad credit history.
If you find it hard to get information about financing, we are here to help.
What is a truck and trailer financing?
Truck operators and big companies may want to expand and purchase more vehicles for their business. However, banks don’t offer financing trucking companies due to the fact that the industry has the reputation of a high failure rate for new business. In short, banks don’t want to take the risks.
This is where the financing through factoring companies comes in. These companies like Interstate Capital lease or purchase the trucks or trailers and make the payment. The trucking company doesn’t pay anything to the truck dealer. You can read more here : newswire truck and trailer financing
Buying new trucks cost about $10,000 to $100,000. It’s a big amount that trucking companies can’t afford to pay outright.
Having the company finance your new trucks and trailers are a big help for your operation. You don’t have to worry about delayed payments and at the same time, you get a good credit standing.
While it is very important to shop for the right trucks and trailers for your business, it is also significant to look for the right truck financing. Check out the following tips when applying for financing:
Know Your Budget for Payments
It may be easy to jump and make a decision to apply for financing for new vehicles, but the question that you need to ask first is, can you afford it right now?
When getting this type of financial assistance, you need to evaluate how affordable it is for you. As you know, trucks and trailers cost huge. You need to consider your monthly repayments before getting one and avoid future issues.
Ask yourself, “Can I afford to pay the repayments?” or “How it will affect the overall financial status of my business?” Having this consideration ensures that you don’t encounter problems in repayments since you have assessed your financial situations beforehand.
Research for Different Factoring Companies/ Lenders
It may be quite difficult for you and you may end up paying more if you just know one or two factoring companies that can finance your trucks. Luckily, there are more companies that provide truck financing with the popularity of trucking business in the industry.
Before applying to any truck finance, make sure that you have researched a wide range of choices in the market to find the best deal. You may consult truck company experts, conduct your own study or use comparison websites before settling on one company.
Truck Features Comparison
Another important consideration when looking for companies to finance your trucks and trailers is their features. Do they offer flexible terms, if you suddenly lose clients or encounter issues?
You may want to find out other features that can help you in your repayments. Do they have policy if you want to extend your repayments? Can you apply for additional repayments?
The more questions you ask, the high possibility that you’ll get the best factoring company that can finance your business. Make a list of features and questions that you have in mind before approaching one finance company.
Make Improvement on your Personal Credit
New truck operators have the most difficult time when applying for financing. Some of them don’t qualify operators that don’t operate the business of at least 2 years. On the other hand, those that have business existing for more than 2 years have 100 percent financing eligibility.
Basically, startups are required to pay a down payment, otherwise they have a perfect credit history and have experience in the trucking business. However, this does not mean that beginners cannot operate a trucking business.
Luckily, there are a number of freight factoring companies that offer different types of financing that can solve your problem and increase your chance of getting approved for loans.
Don’t forget that you also need to get proper insurance before you get approved. Get the right insurance for your business because you may need additional insurance if you have employees and office.