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Loans for a commercial truck and trailer are different than a typical auto loan for a personal vehicle; your local bank won’t offer them. Even banks that advertise their services to small businesses typically refuse to finance trucking companies — trucking has a notoriously high failure rate for new businesses, and banks don’t like risky investments.
Financing for semi trucks: easy if you know where to look
However, this doesn’t mean that semi truck financing is hard to get — you just have to talk to the right companies. Typically, we’re talking about small agencies who specialize in lending for commercial vehicles of all types, such as trucks and trailers (trucking), vans and box trucks and sprinters (local delivery), tractors and combines (agriculture), dump trucks and excavators (construction and mining).
Everybody starts somewhere, and loans for eighteen-wheelers for first-time owner operators and startup trucking companies are offered by every company on the list below.
Because these agencies are often working with their own money, they can get much more creative in who they lend to, even providing loans to those with recent bankruptcies. Credit histories with past due child support, tax liens, and vehicle repossessions are harder to get financed, but even with those negative marks there are companies on the list below who will welcome your business.
Getting real: what to expect from a loan and a lender
Lenders advertise rates such as “no money down” or “as low as 0% deposit.” These are for people with solid credit and no negative marks in their history. Everyone else is going to be in the 10% – 30% deposit range, with tougher credit histories paying higher deposits.
If you want to to get a loan for a $50,000 truck and you qualify for a 30% deposit, you’re going to have to pay $15,000 and the lender will put up the other $35,000. If you get behind on your payments, the lender is going to repossess the truck and keep the deposit for their trouble — yes, even if it was $15,000, you only had the truck for a month, and you were only a few days late.
DON’T BE LATE ON YOUR TRUCK PAYMENTS. Not even a single minute, hour, or day. These lenders have put their own money on the line, and as soon as you give them reason to believe their trust in you was misplaced, they will look to prevent a loss. They’re not like a landlord or mortgage company who might let a tenant or homeowner get a month behind because it’s cheaper than evicting or foreclosing. If that truck payment doesn’t come in on time, even with the most sincere excuse, they’ll send out a repo man.
|Company||First Time Owner Operators?||Low Credit Score?||Allow Negative Factors on Credit?||Minimum % of Down Payment?|
ENGS Commercial Finance
Preferred Capital Funding
|No past due child support - will work with some bankruptcy cases, and some repos.||Varies|
Full Circle Finance
|No recent vehicle repossession||Varies: As low as 1st down and documentation fee|
|Yes. BK's, charge-offs and slow payments all okay.||0% Down Payment required. Will work with both good and bad credit.|
|Requires clean personal credit and no open collections or recent bankruptcies||Varies|
Dostal Equipment Financing
|No recent vehicle repossession||10% for bad credit|
|No recent vehicle repossession||Varies|
|Trust Alliance Capital|
|Will work with bankruptcy, if discharged. Will not work with recent vehicle repossession, or delinquent child support.||0-10%|