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New Commercial Truck Financing Guide

Do you own a trucking company and are looking for new trucks or trailers? Follow our guide to help expand your fleet and save money on financing, rates and fees.

Liara Cohen
Liara Cohen
September 24, 2020

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Desiring to add a new truck to your fleet? Replace an old truck for a super-advanced new one? If your answer is yes, and you do not have a substantial amount of cash lying around, you’re most likely to need some kind of financial aid. 

New commercial truck financing is a different process than light-duty vehicle financing. However, with the right resources and knowledge, you can find the best loan with suitable interest rates easily. 

Institutions that Offer Commercial Truck Financing

National Banks

An important thing to note about national banks while looking for new commercial truck financing options is that most small or regional banks can’t afford to offer truck financing. They can not take the risk involved in heavy-duty motor vehicle financing. However, you can find large national banks that can be of help to you. 

Large National Banks, however, only cater to premium borrowers. They prefer borrowers who have a high credit score, an established business, and a large revenue bank. For a small business owner, the chances of meeting this criterion are very slim. 

Commercial and Semi Truck Financing Companies

If you don’t want a national bank to aid you with a new commercial truck financing, you certainly have alternatives. There are several finance companies that specialize in heavy-duty machinery financing. They generally have experts in commercial truck financing. 

Their specialized expertise and expert knowledge gained through experience is a rich resource. However, they too, like national banks, have some eligibility criteria that is difficult to meet.

If you’re an established business owner or have been in the trucking business for a while, these financial aiding companies are the best financing source for you. 

Online Lenders or NBFCs

If you’re a small business owner or a starter in the trucking business, online vendors are an ideal financing source option for you. Their services are quick, secure, and large enough to meet your truck fleet financing needs. 

NBFCs and online vendors provide customizable, flexible, and lucrative loan options. They are convenient for people who are unable to meet the strict eligibility norms of the aforementioned institutions. 

Documents You Will Need Before You Start Applying for New Commercial Truck Financing

Now that you know the kind of places you can seek financial aid, you'll be able to choose where you'll apply for a loan. But there are a few things that you will need before reaching out to financial aid vendors. 

Regardless of the kind of institution and loan that you choose, you’ll need the following things.  

Information About the Commercial Truck You Want to Purchase

To be credible to raise a new commercial truck financing, you'll have to present the details of your future truck. This does require not only the cost of the truck but also information about the seller and the vehicle.

New vehicles account for less risk, as a greater mileage and condition will get you a better interest rate. Basic information of the truck needed will be

  1. The year and make of the model
  2. Mileage
  3. Media to clarify look and condition
  4. Information about the seller 

Business Finance Documents

The lender will need the following documents to check how much capital backing you have and how easily you'll be able to repay debt.

  1. Business establishment proof
  2. Tax returns details
  3. Balance sheets 
  4. Bank statements 
  5. Credibility score

The lender will check your fundability with the help of these documents. Only if you're in a condition to repay the amount you're to borrow will your application be accepted.

Personal Information

In addition to confirming your financial standing, lenders also need to know that you, as an individual, can be trusted. For the same, you’ll have to submit the following documents.

  1. Criminal background, if any
  2. Lending history
  3. Past bankruptcies, if any

Other Things You Will Need Before You Start Applying for New Commercial Truck Financing

Other than documentation, you will also require to have some money put away that you can pay as deposit money. You will also require some other plan B in case you're not able to repay debt. This means other financing options to fall back on.

A long history of credibility and financial dealing helps to get better new commercial truck financing. 

Positive Signs to Look for in a Financer

The following are a few things that prove that the financer that you’re looking at is ideal and reliable.

Vast Experience

The longer the experience of the financer, the more credible they are. Credibility is a must for someone you’re trusting with your hard-earned money.

Interest Rate

The higher the interest rate, the worse the deal that you’re looking at. If the financer is able to get you a low-interest rate on your fundability, they're optimum for a smell owner-operator.

Payment Flexibility

In case you earn the finances to be able to pay off your debt before the expected date, and your financer does not charge 'exit fees,' be assured of their authenticity. Payment flexibility is a must as income is uncertain in businesses. 

Negative Signs to Look for in a Financer

The following are a few things that prove that the financer that you’re looking at is not ideal and reliable.

1.  Fixed payment schedule

If your financer asks for an ‘exit fee’ or insists on sticking to a rigid payment schedule, they’re likely to not be credible. You should have the ability to save interest money by paying off your debt whenever you have the resources to do so.

2. Hasty Documentation

It is more than likely that a firm that is hasty about documentation is trying to hide underlying implications from you. Be as slow as you need in reading, understanding, and signing on documents. 

Summing Up

Looking for a new commercial truck financing option can be a delicate job. It is extremely important and sensitive to manage your money in the right way. 

The first step towards receiving financial aid is ensuring that you have the documents and resources needed. The next step is to choose the kind of financial institution you’ll ask for aid from. After that, look into the loan options that they offer, and follow caution during documentation. 

With all that in mind, you’ll successfully raise a secure new commercial truck financing venture.

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