If you’re looking into starting and financing a commercial truck business, then we have some tips and tricks to help you along the way!
Like any venture, starting a truck business feels as great achievement. You can’t imagine owning your truck or a fleet. The transition from being an operator to a truck owner feels like a nightmare considering the financial resources required. Many people with such dreams throw them throw the window.
You too might be in the process of giving up. The savings at your bank account are nothing to smile about and the credit history is terrible. If you can relate with this information, you are on the right place. You can still own a truck even when your financial situation is wanting.
Here are steps to follow in securing commercial truck financing:
Assess Your Eligibility
Various lenders have varying criteria for determining clients’ eligibility to financing a commercial truck with a loan. Some will check your credit history, ability to pay a down payment, time you have been in the business, and the type of truck you want to purchase. You will need to know this information before reaching a lender.
Check your eligibility by considering a preapproval exercise. You can reach out to a lender who can help you enquire on your eligibility without hurting the credit books.
Determine the Down Payment
Upon knowing your eligibility, the next step is to determine the required down payment. You need to know how match you will pay upfront and see whether you can afford it. If you have good credit, some lenders do not ask for a down payment. You are also likely to get better interest rates.
But when you have bad credit, you can expect to pay extra interest rates and a down payment. It is important to have this information before proceeding with application processes.
Choose Your Desired Truck
Since you have information on eligibility and down payment requirement, it is time to choose your desired truck. Check crucial information such as the model, make, and year, condition, and mileage reports. This will make it easier for financing a commercial truck.
You should also determine how well it fits with your needs. The truck you choose should be in line with the fleet requirements on mileage and age. Some lenders can deny you a loan if your truck exceeds certain mileage. So, consider this information in your truck selection journey.
Go for Truck Insurance Cover
Upon identifying a truck that fits you best, you need to obtain an insurance cover. Many lenders require you to have a number of coverage before agreeing to finance you. They will require a liability, bobtail, physical damage, storage, and cargo coverage.
You need to obtain an insurance that covers these aspects depending on your truck uses. As such, it is important to have the suitable covers before approaching a lender.
Search a Reliable Lender and Compare Their Credit Options
With the above steps complete, it is now the time to look for a lender. Truck business is booming and many lenders are seizing the opportunity. You will easily find commercial truck financing options fit for your needs. The lenders range from credit unions, banks, direct and online lenders. However, fraudster are also in this field. You will lead to be careful to avoid falling into their hands.
Do your due diligence by performing a background research of each lender. Assess their online reviews and potential referrals. This way, you will get substantial information to help you make a decision on the best lender to go for a truck financing.
In addition, you need to look at the kind of loans the reliable lenders are offering. Check their design to know whether they will help you finance the desire truck. Also, check the eligibility requirements, interest rates, down payment, and terms. Compare different lenders loans to determine which option is good for your situation.
Get the Necessary Documentation and Complete the Application
You have completed the search processes and picked a lender to finance your truck. Now, it is time to apply for the loan. Your lender will request you to submit various documents. You will be requested to attach a financial statement, tax return, licenses, CDL number, insurance copy, and other crucial documents. You will need to gather all these document before completing the application form.
If you have these documents, you can proceed to the application. Your lender cam require you to submit the commercial truck financing loan application via online. Other require you to present it in-person at their offices.
Regardless of the option, ensure you get all the documents ready and attached. Assess your application to ensure it is error-free and contains all information. This way, you will avoid delays. Your loan approval and funding will happen in real time.
Financing a Commercial Truck Made Easy
In a word, commercial truck financing is not a complicated process. You can easily complete it without any challenges. All you will need is to follow the above steps consistently. That way, you can expect to receive funding even when you have bad credit.