Understanding the services provided by commercial truck financing

The search for commercial truck financing can be a daunting task to the uninformed consumer. There is a plethora of commercial vehicle lenders and different types of commercial truck loans. If you are in need of used truck financing it is important to understand the services provided by commercial truck financing.

A commercial truck loan is when the entire purchase price is financed. In most cases a down payment or trade-in vehicle is required in order to achieve the loan, and the remainder of the purchase price is paid off through the monthly payments throughout the remainder of the term. At the time of the purchase, taxes are paid on the entire purchase price. A tax deduction may be claimed on a portion of the interest paid throughout the year. A deduction may also be made for the depreciation of the vehicle, depending on the IRS depreciation schedules.

A commercial lease is another option in commercial truck financing and can be used for used truck financing as well. Depending on the current financial situation of the business, many businesses opt for a commercial vehicle lease over a commercial truck loan. A lease is a brilliant way to finance a commercial truck or trailer. The finance terms can range from 24 months to 60 months and the approval process is generally quicker than that of a bank loan; usually an approval can be received with in 24 hours. In most cases a down payment is not required; instead, some commercial lenders will request two monthly payments upfront. A lease does not appear on your balance sheets as a debt, where as a purchase will increase your liabilities. Another benefit of a commercial vehicle lease is the tax write-off. Monthly payments can be written off in their entirety because they are tax deductible because the cost of the equipment is considered as an operational expense and not a liability.

Although the search for commercial truck financing can be a tad overwhelming, if you are armed with a general understanding of the services provided by commercial vehicle lenders, you will be well on your way to making the right decision for you company. Be sure to consider all of your options as well as your company’s financial strengths and needs. There are commercial finance options available for all types of businesses and business credit. If you do your due diligence, you will be able to find the perfect fit for you and your business.

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