How To Finance A Used Hotshot Trailer

Discussion in 'Expediter and Hot Shot Trucking Forum' started by Hotshot Newbie, Aug 20, 2021.

  1. Hotshot Newbie

    Hotshot Newbie Bobtail Member

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    Aug 9, 2021
    Houston, TX
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    My goal is to finance a Used trailer that I have found. The trailer is $20,000 and I would like to finance $15,000 of it if possible. I would like to keep 6 months of Truck, Insurance, and Trailer payments on hand as a buffer of cash starting up. Hence the want to finance.

    So, I am not currently working. My Credit score is 832, and I have 31K in the Bank to start up the hotshot business. I bank with Wells Fargo, so I checked with them for a personal loan: Denied!! I am thinking it is because I am not working. They did not have a Secured-Loan option.

    For future loans, it seems like the trailers value, more specifically the title will be the thing that a lending institution will hold as a Secured Loan.

    I checked with Sheffield because they finance for Big Tex and Diamond C, but they only finance New equipment. I checked with Currency Finance found on Truckpaper.com but they only finance to established Business Owners that own homes and have 3 months of bank statements proving their income. I've check with a few other things but I am not having luck.

    There simply are no reasonable New trailers on the market to purchase and get financing that way. As in the Dealerships are all sold out. I've checked in about a handful of states. The wait time for new builds seem to be very long, like next year long, I've heard from a handful of trailer dealerships. All this keeps me preferring a used trailer.

    I have heard a Local Credit Union is a possibility to get a loan. I thought I would just check-in here to see what anyone might suggest?

    Thanks
     
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  3. evanstransport975

    evanstransport975 Bobtail Member

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    Mar 1, 2020
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    When I started mine I was also unemployed with a good credit score. I was able to get a business loan for a 10k used trailer with america first credit union, but I'm not sure if they are in your state.
     
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  4. Hotshot Newbie

    Hotshot Newbie Bobtail Member

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    Aug 9, 2021
    Houston, TX
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    I will check it out. Do you recall what type of loan? Secured Personal by chance? Thanks
     
  5. RocketScott

    RocketScott Medium Load Member

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    Tacoma, WA
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    This is horrible advice...but what I did

    I maxed out two credit cards to buy my truck. Payed off the first in a month and the second in three months. Huge risk, but I knew the income would be there if I bought it. One of them was a discover card and the cash back was almost as much as the interest on the other card

    If your credit score is as good as you say you probably get offers for 0% on balance transfers for 6/12 months. Not sure if that's still a thing but I used to get those offers all the time. Still get one every now and then. If you can do that it will buy you more time and be cheaper than a bank loan. You have to be on top of it though. Miss a payment and all the interest comes back

    Again: Horrible advice. Lots of risk, but if you can manage it properly it will come out cheaper than a bank loan with less hassle
     
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  6. longhaultransport

    longhaultransport Light Load Member

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    Dec 25, 2009
    West Central, Florida
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    Some of those zero interest credit cards will also send you checks that you can use to purchase things. If you are financially responsible, it might not be a bad way to go. Take the balance and divide by 12 months and make that payment every month, on time. Almost free money.
     
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  7. Hotshot Newbie

    Hotshot Newbie Bobtail Member

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    Aug 9, 2021
    Houston, TX
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    Thanks @longhaultransport and @RocketScott , I really appreciate the input. At the moment I only have one credit card. I never needed another. I don't really want to use it as my primary loan resource as I want it as a backup resource to really get me out of a jam if needed. I see the 0% introductory APR's out there, but I do not even want to apply for them; because, I likely will not qualify as the crux of my problem is I am not currently working. I think my best option is to instead of starting a hotshot business at this moment, it is to go to work as a company driver for a Mega Carrier or maybe a company on Indeed looking for a hotshot driver. That way I can stack more cash, get hands on securement practice, and possibly test the waters of living out of a pickup before I invest into doing so.

    It just feels so backward on the thought of going to work for a company with the intent of quitting as soon as I can secure a loan for the truck and trailer. My parents mentioned applying for a small business loan, but I really have not heard of anyone taking that route.
     
  8. evanstransport975

    evanstransport975 Bobtail Member

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    Mar 1, 2020
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    That's what I did a business loan
     
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  9. SMK Shoe

    SMK Shoe Bobtail Member

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    Aug 24, 2012
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    Would the owner of the trailer finance you. He keeps ownership of the trailer and you lease it from him with the intent of in six months paying off the remainder and have title transferred into your name. He gets monthly payments and still owns the trailer, You get to work for six months to ensure you enjoy the hotshot life and save money vs secure loan for the trailer.
     
  10. Lite bug

    Lite bug Road Train Member

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    Columbus Ohio
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    I leased a trailer starting out. My wife said why did you do that ? I had a similar thought process as you. I should had bought it , ended up buying it for 1 dollar after the lease spent more money to tell you my story. Another piece of advice get the 40ft trailer, i still miss loads without one.
     
  11. SMK Shoe

    SMK Shoe Bobtail Member

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    Aug 24, 2012
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    I agree completely about the 40'. Lots of brokers won't even talk to you with less than a 40'. Even if it is a partial load.

    Problem with buying a trailer now is finding one. Wanted to upgrade to a Diamond C but can't get into one for six months. No-one has them on their lots. Someone starting out hotshotting now has to pretty much do what ever they need to to get a trailer.
     
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