The trucking industry is a strong backbone of the modern American economy. Trucking is responsible for most of the freight movement across the country. The market was worth $723.3 billion in 2020.
Trucking can be a lucrative business if done right. Many truck drivers dream about having their fleet of trucks conquer the roads, and small trucking businesses aim to expand their operations to make more money. However, these trucking businesses often struggle to find quality small business funding options to truly elevate their business to new heights.
The most successful trucking businesses can adapt quickly to changing trends and seize on strategic investment opportunities to help them get a competitive advantage in the market. However, to do that, you need money, and most companies don’t have adequate funding to help them seize such opportunities. All is not lost; we’re here to help you! Here are some of the best ways to finance your commercial trucking business.
Truck-Specific Bank Loans
Businesses with a good credit score can opt for a truck-specific bank loan designed to help small to medium-sized trucking organizations. These loans have low-interest rates and offer better repayment terms than other lending programs. Some of the leading banks in the country, such as Wells Fargo, have truck-specific bank loans that can offer you equipment lines of credit, lease-purchase agreements, or dealer retailer finance programs.
The repayment term often ranges between 12 to 84 months and can also be extended up to the expected lifespan of the truck. Interest rates can vary; however, the current rates are pretty low, so you can take advantage and get your finance sorted right now. Businesses with good credit scores tend to get better terms than those with poor ones.
Alternative Small Trucking Business Loans
If you’re seeking alternative sources of funding for your trucking businesses as your credit score is not good enough to get a traditional loan, then there are bad credit business loans that you can go for. Alternative financing companies provide financing solutions for truck purchases. They accept applications from lower-credit score applicants. However, they may charge a high-interest rate to offset the riskiness and have a shorter repayment term.
There are several companies out there that can provide multiple ways to finance your commercial trucking business. You can get equipment financing, credit lines, or fast working capital loans to meet your temporary working capital requirements. You can opt to go for a digital lender who will have a streamlined application process, and they can guide you to the best loans that are best suited to your business needs and requirements.
Alternative loans for trucking businesses can have repayment terms ranging between one to eight years. However, most offer a maximum term of five years. The interest rate you receive will depend on your credit profile and creditworthiness.
Small Business Administration (SBA) Loans
One of the most popular loan options for small trucking companies is SBA loans. The Small Business Administration guarantees several loans through its financial institutions and lenders. You can consider going for the SBA 504/CDC loan that’ll help you expand your trucking business.
These loans provide long-term, fixed-rate financing that can go up to $5 million for significant fixed assets that help in promoting business growth and encourage job creation. The terms of the loan can vary. It can go from 10 years to up to 25 years. The interest rates are also relatively low, making it a favorable proposition for small businesses.
However, the competition is high amongst small businesses looking for SBA loans. The criterion is quite stringent, and you need to fulfill several factors before qualifying for the loan. Banks are not hesitant to give out SBA loans as the government backs them, and their money is protected if the business defaults on loan.
Equipment Financing
When operating a trucking business, your trucks are considered equipment, so you can explore the equipment financing avenue to grow your business. Equipment financing is an alternative financing option that provides money to buy machinery, computers, vehicles, and more.
The equipment you are willing to purchase serves as collateral, so you don’t need to provide anything else to secure the loan. They have a favorable repayment schedule and can cover the cost of buying or leasing new or used trucks.
Partnership
If you don’t want to get into the hassle of getting a bank or any other alternative types of financing, then you can consider joining hands with someone who can bring in the necessary investment. However, when you go down this avenue, you’re giving up some part of the ownership of your company. Also, they’re likely to bring a one-time investment that might not be enough to fulfill your ambitions. Therefore, this option should always be considered as the last resort.
Small Business Credit Card
Another short-term financing option you can go for is to take out a small business credit card. Search for a business credit card with a low-interest rate and APR. The card can help you borrow money immediately without having to worry about high-interest rates. If you run a stable small business, you’ll find it easier to qualify for credit cards.
Where To Get the Best Small Business Loans?
It can be hard to find a quality lender who can help you get a commercial trucking loan to expand your business. This is where QuickAssist has stepped in to transform the entire lending industry. The digital lender will connect you to some of the top lenders in the country to help you get the loan that fits your needs and requirements.
The company has experts who’ll carefully examine your loan application and recommend the best possible solutions to help you achieve your business goals. Check out their website to learn more about their services, or contact them for more information.
About The Author
The author of this article has been associated with QuickAssist for several years. QuickAssist is a leading Florida-based brokerage firm with years of experience and expertise in the industry. They offer top-quality business financing loans to a wide range of businesses across numerous industries in the United States. They have individualized alternative financing plans for businesses with bad credits.
