Anyone who understands how the banks lend money on Semi equipment financing?

You don't get the title for collateral purposes (aka actually owning it) until all payments are made.

A lien, whether as a lease or a retail loan, still has the bank as the "Legal Owner", while the person making payments is usually listed as "Registered Owner". Its set up this way so the bank can come get the equipment if the lien isn't satisfied, since it is technically their equipment. That doesn't change until the lien is satisfied and the bank signs off on the title. Until then, you don't have any right to use it as additional collateral.

Not sure what you meant by 20-30% financing? You mean as a down payment? Or interest rates?

The better bet is rather than selling, you purchase the equipment outright, and then lease it to the drivers you are trying to set up. Most banks are going to want to know exactly who is using the equipment unless you have ALOT of collateral down to protect them from you making a bad loan, so there is going to be some issues with you purchasing equipment using either a loan or a lease, and then sub-leasing it to others. It also would get messy if you have to keep adding/subtracting people from the registration if you have drivers default.

 

Nope it isn't much different except most banks won't touch cmv's anymore.. to high of a risk and they don't want to have to track it down in Timbuktoo.. I don't know of a bank within 100 miles of my house that will loan on a truck.. Last truck I got a loan for through a bank was in the late 90's.. They are scared of um...

 

This sounds like a plan for a disaster.
Buy a truck, and re-sell [ or lease ] it to someone who cannot get financed ? Sure , there are a few drivers who could make it work, but the vast majority would wind up costing you money. A great deal of money.

 

I looked at an operation like that 20 years ago.


And ran away as fast as I could. Figured the day would come when I could do traditional financing and that would be when I would get my truck.

 

Most banks actually prohibit you from turning around and either selling, or leasing out, the vehicle without paying off the lien, whether its a 4wheeler or a truck. Same with mortgages on a house you are renting rather than living in. You have to let them know what you are doing with the vehicle.

20-40% is not that uncommon for a first time equipment purchaser, with rough credit. Its possible to get that down to the 10-20% range with better credit, and looking at the right vehicle (some combination of lower price, low miles, re marketable specs, good equity to loan value, etc).

 

What you are looking for then is a credit line, secured not against the trucks you are buying and selling, but against your personal assets.

Best bet is to start talking to a commercial bank officer and see what they are willing to arrange.