Learning how commercial truck financing works could be your first step toward a growing trucking business. Do you know how to get the funds you need? Here are four things you should know.
Financing a new commercial truck or truck repairs can help you keep the commitments you have made to your customers. Whether you need to finance one vehicle or you want to expand your fleet, applying for a commercial truck loan should be one of the first options you consider.
How Commercial Truck Financing Works: The Basics
When you take out a loan to purchase or repair a truck, the truck you are financing serves as collateral, which reduces the risk your lender takes on when they fund your loan. In other words, your lender may seize your vehicle if you fail to pay your debt down or otherwise do not uphold your end of the loan agreement.
Many business owners choose to go through traditional banks to fund their truck purchases and repairs. However, a bank is not your only option when you need to secure capital for your trucking business. Going through a lending company like AA Bankers may be a better option, depending on your credit situation.
Loans vs. Leases
While a loan gives you full ownership of the commercial truck at the end of the life of the loan, leasing a commercial truck may also provide some benefits. For instance, a lease typically has lower monthly payments, which could allow you a wider margin to take care of other costs associated with your business.
Be aware, however, that leases usually have higher interest rates, which could mean you will pay more for your use of the commercial truck. Leasing may also a good option for those who have low or bad credit. However, other options, such as sub-prime financing, exist for business owners who have poor credit.
Want to learn more about how commercial truck financing works with AA Bankers? Contact us today.
What to Expect
When applying for a commercial truck loan, you should expect your lender to request certain details about your personal and business finances, including:
- How long you have been in business – The longer you have been operating, the more likely you are to qualify for certain forms of funding.
- Your credit score – A good credit score will land you better terms for your loan and increase the likelihood that you will be approved.
What to Do If You Are Denied Financing
It is always possible that you will be denied financing, but poor credit one of the most common factors that often forces business owners to get creative when it comes to securing working capital.
If you have been denied financing for your commercial truck, don’t worry. You still have options.
Learn How Commercial Truck Financing Works with AA Bankers
Get in touch with AA Bankers today to learn how we can help you find the funding you need. Contact us now!