Alternative Finance Options

Discussion in 'Trucker Taxes and Truck Financing' started by The_SnowMan710, Apr 17, 2024.

  1. The_SnowMan710

    The_SnowMan710 Bobtail Member

    Dec 17, 2022
    We all know the typical ways of getting the money to buy a truck or start a business... either go to the bank, save it up yourself, or hope a long lost relative leaves you a big pile of money. I don't know much about financing. My understanding basically boils down to knowing that you need more money coming in than going out. I don't understand how operating notes and things like that work. I have been trying to learn more about how that side of a business works and been doing some reading. I have two questions to see if anyone has any thoughts or real world experience.

    First, has anyone financed their operation through some other means that does not involve a bank or any other way described above? (If you have a long lost uncle that likes to give away money, I'm totally up for that!) It's not that I don't have a good relationship with my bank or that they wouldn't support me, but I would rather keep the money in my pocket. I also don't want to live under their thumb forever, either. In my mind, the point of having a business is for it to sustain itself, not to live or die by what your operating note will allow. I have no problems utilizing a loan to start things off, but I don't want perpetual debt.

    Secondly, I've been reading about what boils down to Infinate Banking. Sounds good on paper and in theory but we all know that isn't how real life always works. It seems like an easy enough process/concept but it also seems to be too good to be true. I'm naturally leery about it because it's not a widely used method but also curious if it really works as good as some people say that it does. Has anyone got any experience with it, good or bad?
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  3. Big Road Skateboard

    Big Road Skateboard Road Train Member

    May 2, 2021
    I know nothing about financing, but judging from how good this sounds, I'm certain you'll succeed
    The_SnowMan710 Thanks this.
  4. Ridgeline

    Ridgeline Road Train Member

    Dec 18, 2011
    If you are looking at an easy way to finance into the industry, there isn't any. This isn't a new venture where capital financers are going to take the risks on one or two truck operations. The failure rate for carriers is rather high, the failure rate for owner operators is very high - both won't be coming down to normal levels any time soon.

    The risk has to be on the borrower, not the lender.

    The idea of perpetual debt seems to be a misconstrued one, there is debt - bad debt that you will never get out of because of mistakes and over extensions. But then there is debt - good debt that you leverage into making more money.

    There is no real in-between or going from one to another.

    Debt is hard work to manage and it has to be managed if you are leveraging it.

    If you want to learn, start with the basics, and how to manage a company. Then you learn how to finance the business.

    As for Infinate Banking, it isn't something you can do if you are looking for money for a truck, you have to have a paid up whole life policy to borrow against.
    tscottme and The_SnowMan710 Thank this.
  5. The_SnowMan710

    The_SnowMan710 Bobtail Member

    Dec 17, 2022
    The more reading into I do, the less I like the idea of Infinite Banking. I do have a policy that I can borrow against, but you're essentially gutting your policy to spend money. It has too much of a rob Peter to pay Paul vibe to it. The option is still there if I get in a jam but even then, it's probably something you could get yourself into trouble with pretty easily. Even though it is an option that is available to me, I don't think it's one that I'll pursue.
  6. Short Fuse EOD

    Short Fuse EOD Road Train Member

    Jul 29, 2015
    How I did it. I had/have money in the bank. It stays there unspent. I use loans for equipment, but I leave the money in the bank for an emergency. It gives me a little flexibility if I need it. I recommend starting a business with money, not broke and hoping to make it. Just work hard, sacrifice, be patient, and you can have a nice start with no debt and some money in the bank.
    The_SnowMan710 Thanks this.
  7. snowwy

    snowwy Road Train Member

    Jul 6, 2009
    Except you have to take SOME money out.

    As mentioned above. Banks want to minimize risk.

    Might be some leniency after a couple years.
  8. Knightcrawler

    Knightcrawler Heavy Load Member

    Apr 10, 2017
    Mpls, Mn oops Ocala, Fl.
    I have said this 100 times before, and I will keep saying it. Talk to YOUR bank. Go on in, tell them what you want to do and ask THEM if they can help you do it. If they wont, then take that as a sign. Go to work for someone and save a few pennies and try again in a couple of years. It is by FAR the best way to go.

    Or you could find a few "good fellas" that will give you a little... And take a lot...
  9. Ex-Trucker Alex

    Ex-Trucker Alex Heavy Load Member

    Jan 7, 2023
    Frankly, if you have to resort to 'creative financing' techniques, you are probably too poorly-funded to start a business of your own.
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