Trucking companies all over will find themselves at some time in need of commercial truck financing. They begin by obtaining information for commercial truck loans for new or sometimes used truck financing. Depending on their needs, there are many financial institutions that are ready to help out. How does one go about understanding the various programs for commercial truck financing? What is it going to take to get Commercial truck financing? Is a Commercial truck loan more beneficial than a lease?
A commercial truck lease allows you to the right to use the truck as your own, within certain rules while the lease is in force. You will be required to make monthly payments and will have the option to ‘purchase’ the equipment when the lease is term. The residual value of the equipment is the purchase price. Monthly payments on a lease are typically lower than a loan and has smaller down payment requirements. In a loan, you will also make monthly payments and when the loan is paid off, you own the equipment.
Let’s talk about the client needs. If this is a fairly young company, the idea of used truck financing might be more beneficial for them instead of looking at commercial truck financing for a new truck. The payments on a used truck financing will be far less than a new model and help them to grow the business with less investment in equipment, thus keeping more profit and conserving capital. As the company develops and their needs change, they will eventually seek and obtain commercial truck loans as they add to their fleet. Once the fleet and comparable borrowing grow, it becomes easier to obtain commercial truck loans.
To begin with, a brand new company can face many challenges because they don’t have a track record with previous commercial truck financing. It is not the end of the line however. Sometimes having a strong financial backing can help in securing commercial truck loans. Used truck financing might be the way to go for them, as used equipment can be easier to finance for newer companies. It’s a place to start.
The application process is simple. You will be asked to complete and application and supply bank statements to determine the strength of your borrowing ability. A credit report will be obtained to determine your borrowing history. Once all is compiled and examined by the credit department, you will receive your loan approval tailored for your needs, whether that is used truck financing or new commercial truck financing. Most commercial truck financing companies can tell you right away if you will qualify in obtaining a commercial truck loan.
* On approved credit