help!!! i am thinking of becoming an owner operator

yes, i am considering my own authority. i could not go the lease route, i just see that as being a company driver with a truck payment. you dont get to pick your loads...or pre-plan for that matter, most companies will restrict the age or size of your truck, you haul their trailers....and that comes with spending more time in the shop getting their equipment repaired, etc...and still, they try to never get you home, and when you do get home they let you know they're not happy about it...i know a few lease drivers. i don't know any lease drivers with a happy wife. right now my wife is content with my 6 days out, 48hrs home, but both of us would prefer if i could stay out 8-10 days and be able to afford 3 or 4 days home.

 

also as previously stated, i would definitely go with an older truck...pre 03 with a cummins motor. that is why i was able to justify the 20% in repair fund, figuring my payment would be much smaller and hopefully paid off in 12-18 months. i would NOT go with typical truck/ trailer financing, it would have to be a business start-up loan/ line of credit that would give me some cushion after paying for the truck, trailer payment, start-up costs, and some fuel... i figure i would still need 10k++...or at least have access to it in case i cant get paid fast enough on my first several loads, or had some break-downs my first month. i think a few people posting replies did not catch on to this. now, with that being said, if i could somehow secure this type of financing, does anyone think this plan could work?

 

A business line of credit would likely be at a lower interest rate than standard equipment loans. You may have to commit personal assets to secure the line of credit. It could work, but I would be very cautious about starting this without any of your own money in the deal. The less you can borrow the better. You need to sit down and do some projections and see if it makes financial sense when you look at the numbers. I would plan on low revenue and high costs when doing projections. Most people plan for the best. That is not the way to go when you are looking at business projections.

 

It could work. Like G/MAN said you will need personal assets to secure this loan. One possibility might be an SBA guaranteed loan. It is harder than ever to get loans and just isn't likely to happen is this economic climate unless you have a house or something with alot of equity. And remember if you take this route failure most likely means losing what ever you put up as collateral.

 

will tell my exprience as O/O but please dont think he can i can to cause its still very tuff. but in 03 i bought 99 FTL FLD120 C12 cat with 630xxx miles for 20000. loan from my local bank at 700 for 36mons paid off early leased pulling continers home everyday. dont remember all the $ numbers but i was very comfortable for 4yrs. i sold out in 07 cause of fuel and slow freight. a guy came from LA bought it on the spot when he drove and seen the 2" stack of repair receipts. you could park on white carpet if wanted. i knew not to buy to much truck for what i was gonna make and how much i wanted to be home.

 

You may not be able to get an SBA loan to buy a truck because alternative financing is available. I would stay away from an SBA loan due to all the red tape and the government getting too much into your business. If you do get an SBA loan you will most likely still be required to pledge personal assets to cover the loan. In order to qualify for an SBA loan you will usually need to have a certain amount of your own money in the deal. At least that is the way they used to operate. Things could have changed with the banking bailout.

 

I agree G/MAN. I just mentioned the SBA because I saw somebody on here post that was how they got started. I can't remember who it was.

In all honesty, I guess I shouldn't have mentioned it because I wouldn't do it. With this broadband project I have been working on I have had all of the government running my business I can take. I am so done with them!

 

SBA has become a joke. Banks don't even want to work with them. And when you look the lack of solid information on revenue and expenses for a trucking company that is working boards to start it would be a nightmare working with these people.

Plus over the last 10-years it seems that you have people that have never run a business running this program. In the early 90's when we worked with the SBA on a business they had a lot of retired business people. Almost like SCORE.

It would be nice to have a SCORE for truckers.

 

To the OP... The above two posts ^^^ are the most dead on for you to consider.

If you are considering your own authority then take a look at this thread http://www.thetruckersreport.com/tr...you-interested-having-your-own-authority.html but be aware that with your own authority options will be limited until you have at least 2 years of CDL experience, especially pertaining to equipment financing and insurance. You will also need to have your own trailer or find someone that you can rent one from. And you definitely will need approximately $3k in the bank dedicated solely to getting your truck legal to ride on the road (IRP, 2290, MC#, Drug Test Program, Truck & Trailer Inspection, etc).

Most important part of the equation is that you said you can't stand being a company driver....... WHY? When you become an O/O you will either have a whole new set of pains to deal with, or exactly the same pains, or a combination of both. If it is about the ability to make money then I say go for it. But do it smart. Listen to these people on here. Not the ones that tell you Don't Do It! But instead to the ones that give you advise on How To Do It and what to watch out for. We have some great minds on here. GL

 

Quite a few years ago I checked into SBA loans for another company that I owned at the time. I would rather take my chances on conventional financing than deal with all the BS. I remember going to an SBA seminar in Atlanta once. There was a lot of money for women and minorities for various endeavors. Little at the time for white males. It seemed to be blatantly discriminatory to me. According to one government representative, white men have access to other means of financing a business than women or minorities. Go figure.

I do have a friend who was able to secure an SBA loan for a manufacturing company. He was an immigrant and would have been considered a minority. They still required most of his assets to do the loan.

I met some people with score when I was more involved in some civic organizations. Most of those whom I met had more experience in retail than other types of businesses. SCORE is a volunteer organization and I suppose that there isn't many requests for those with trucking experience.