Learn how our fleet financing options can work for you
April 21, 2022
When we create a company of any kind, after consolidating our operation, the next step will always be to look for growth options, the truck sector is no exception, when we have our company positioned, new customers begin to emerge and the need to increase our installed capacity grows.
In this industry, growing means, increasing your operation and therefore, increasing your fleet. To accomplish that, business owners has two options: buy or lease. Buying means you pay for the fleet outright and own the equipment when you've paid it off. Leasing means the vehicle or fleet serves as collateral, and you have the option to purchase it outright later.
Unless your small business has a lot of money lying around, buying means securing a loan, just as you would with a personal vehicle. There are some benefits of a trucking business loan.
It may not require cash collateral, since the majority of small businesses do not have the funds to purchase a truck, not needing cash collateral makes trucking financing a lot easier, the truck or equipment you are purchasing acts as the collateral.
There may also be a longer repayment period than smaller loans, which may translate to an overall lower monthly payment, meaning this is less of a burden on your monthly cash flow. If you're buying an entire fleet, your loan will be sizable. The more time you have to pay it off, the less strain that monthly loan payment will put on your profits.
Interest rates for this type of loan may be lower, because the truck is your collateral, you typically can get a lower interest rate than you can with other unsecured working capital loans. This can help you save on the loan in the long run.
Equipment purchases like commercial vehicle fleets are also a tax write-off for your business, which can help you save on taxes.
A trucking business loan will provide your trucking business with the working capital you need to purchase a commercial truck. Exploring financing options for your business can give you the resources you need to address the biggest challenges your trucking company faces.
If your business needs a vehicle, either because you run a trucking company or because you need to drive for your work, business financing geared specifically toward equipment purchases like commercial vehicles can help you reserve cash. This is especially important for startups who may not have much capital on reserve. If you haven't been in business long, you may not qualify for more traditional types of loans, but because commercial trucking loans use the vehicle as collateral, you may find it easier to qualify for this type of financing.
You can benefit from having a trucking business loan, in several situations, if you're transitioning from being a driver for someone else to an owner-operator, or if you are expanding your fleet of commercial trucks, or you have an emergency that requires you to replace a vehicle.
Taking out trucking financing can help your business to build a business credit. Each of your monthly payments should be reported to one or more business credit bureaus, which, over time, will help raise your business credit scores and contribute positively to your credit report. That will help you qualify for additional financing down the road.
Among the options Tru Capital can offer you to expand your fleet or simply grow your business are: Business Line of Credit, Equipment Financing, Merchant Cash Advance, Business Term Lending. If you're ready to take your trucking business to the next level, we can provide what you need to leverage your trucking company to success. Call or text us @ 917-243-3113 to solve your questions or get more information.