Financing equipment with a credit card?

fortycalglock · Oct 3, 2013

heysteveh said: ↑

Assuming you are savvy with money and business plans, the above quote from Gman is definitely worth your consideration. Even if you are able to finance yourself through the creative use of credit cards, if you stick around trucking long enough, eventually you will probably wish you had a commercial loan somewhere on your credit history. When I got into trucking 4.5 years ago I had a 800+ credit score and still had to pay about 13% interest for my first used truck because I had no commercial loan history. It was a 3.5 year loan and I paid it off in 18 months because I felt like someone was robbing me every time I made a payment. Now my truck is paid for and I just wrote a deal on a brand new Utility trailer for 29k yesterday. I came very close to financing it exactly the way you are describing. I had 3 of 4 dealers in town tell me that I could use credit cards for the entire purchase but that they would charge me anywhere from 3-4% extra because of the fees they would incur for the credit card (even though I know it only costs them about 2%). All the quotes on financing from the dealers (most of which were from G.E. Capital) came in at about 8.95% even with my excellent payment history on my first tractor loan. I was ready to do the credit card thing until I sent an application in on my own to Trans Advantage (United Van Lines finance Department). They hooked me up with a 6.5% TRAC lease with a $100 residual at the end (I do not drive for them). Because I live in Arizona I do not have to pay sales tax on the TRAC lease (just on the $100 residual at the end to complete the "purchase"). If I would have used my credit card power to purchase, I would have had to pay 8.3% sales tax on the sale.

All this to say: just keep figuring all the angles you can and listen to different opinions on this forum. If you really know what you are doing there is nothing wrong with financing yourself with the creative use of credit cards. Is it risky? Of course it is... but so is a regular commercial loan for 13-30%!
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Never pay sales tax on a trailer purchase! You can tag it out of Maine using an agent. I always use MBI, but there are others. No sales tax, very minimal fee, multi year plates and fast turnaround. If you're up in the Northeastern part of the country, almost every trailer tag is from Maine.

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