Do you have questions about commercial truck financing?
Get answers here in our frequently asked questions.
Q. Lease or buy—what’s the right choice?
A. Both options have pros and cons, but the primary difference between leasing and buying is ownership. With a lease, you're paying to use the equipment, similar to renting. You can buy the equipment at the end of the lease, but you are not obligated to.
With commercial truck financing, you're a buyer. After you've repaid the loan, you own the equipment outright. Because of that, the monthly costs are usually higher, but your long-term cost of ownership is usually lower.
However, many types of leases are out there, so it gets more complex.
Below you’ll find more details on leasing your commercial equipment.
Q. What are the benefits of leasing commercial trucks or equipment?
A. Here’s an overview of the benefits and issues with leasing.
- Preserves cash. Commercial truck leasing usually results in lower costs since you are not buying the equipment. There is usually no down payment, and the monthly payments are also lower. Leasing equipment instead of financing keeps more working capital available to maintain and grow your business.
- Potential tax benefits. You can usually save on taxes with leasing since the entire lease payment is deductible as an operational expense. That is not usually the case with loans. (Please note this is general information; please check with your tax advisor for specifics based on your situation.)
- Easier on your balance sheet. Buying equipment or vehicles with a loan will show up as increased liabilities on your balance sheet. This can increase your financial leverage ratio, which some business owners prefer to avoid. Leasing provides off-balance sheet financing since it is only reflected as an operating expense.
- Lower maintenance costs. One significant benefit of leasing is access to newer vehicles or equipment. That usually means lower maintenance costs and fewer hassles. And with leasing, it’s much easier to periodically upgrade to the latest models and avoid outdated equipment.
- Easier application process. Overall, leases are usually much quicker and easier to apply for than a loan. With TruckLenders USA, our application-only lease programs typically get you an answer within a few hours.
At the end of the lease, you can choose to return the equipment or buy it out.
Q. How does leasing compare to financing?
Financing can be more costly, but your organization will own the equipment outright at the end of the payment term. So you can usually expect lower long-term costs.
However, financing may be more difficult for those with lesser credit histories.
Leasing also has tax benefits, so there are various issues to consider.
Q. What types of leasing options do you offer?
At Truck Lenders USA, we offer a wide range of leasing products and custom leasing solutions to meet your needs. Even in today's more rigorous credit climate, our experienced team works hard to help you find the right program.
Here are the types of commercial lease programs we can arrange for you:
- Operating Leases. These leases are usually best if you're not interested in owning the equipment and prefer to simply save money. You can usually deduct the entire amount as an operating expense, providing a tax benefit along with lower payments. You will still have an option to buy the equipment at the end of the lease; however, it will be at the fair market value, so you will not have built up any equity. The title will never pass to you unless you arrange a buyout at the end of the lease term.
- Capital Leases. Another option is a capital lease, which can be beneficial if you want to eventually own the equipment. The title will actually transfer to you during the time you are making lease payments. Capital leases are considered equivalent to purchases for tax and accounting purposes, so you usually won't get favorable tax treatment. The buyout amount is set and usually ranges between $1 and 10% of equipment cost.
Q. What are your minimum requirements for commercial truck financing?
A. At Truck Lenders USA, we can finance just about any vehicle or equipment with a title. So we can help you purchase anything ranging from work trucks, construction equipment and commercial trailers to hybrids, compressed natural gas vehicles and executive limousines.
Here are more specific guidelines to see if we can help.
To qualify, you must meet these requirements:
- A minimum credit score of 675
- 2 years minimum verifiable time in business
- Commercial truck references
- An active bank account in your personal or business name
- For financing a sleeper truck, there is a minimum fleet requirement of three trucks
Then, any equipment financed must meet the following criteria:
- Trucks must be 7 years or newer
- Trailers must be 7 years or newer
- Prices must be within 10% of comparable values
- Minimum financed amount of $15,000
- Have a proven and accessible used-vehicle market.
Q. Why work with Truck Lenders USA instead of a bank or other lender?
A. At TruckLenders USA, we specialize in commercial truck and equipment loans, and we've been doing it for 30 years. You may find that other lenders don't understand your business well. They may ask for detailed financials, tax returns and other documentation. Then they try to make sense of it all. Responses are often slow.
Since we know your industry, we don’t need mountains of paperwork from you. In fact, many of our programs don't even require financials. The process is fast and streamlined. And we won't keep you waiting; you'll usually get an answer back in as little as 2 to 4 hours.
Additionally, we can fund quickly, and our rates are competitive with what you'd pay elsewhere.
Throughout the process, our specialized team is always a phone call away. You may simply deal with a call center at other lenders and banks.
Q. My company hasn’t been around too long. Can you help me with financing?
A. We can help you once you have been in business for at least two years.
Ready for a no-hassle financing experience?