4 Loan Programs Every Trucking Business Owner Should Consider

Female Trucking Business Owner

Running a trucking company, or any type of business is not a walk in the park. It can be challenging to run a profitable business amidst the economic challenges trucking companies face.

Fortunately, a properly managed trucking company has the potential to be very lucrative. The only downside is that the industry is often capital-intensive.

Trucking business owners should have quick access to trucking business loan programs to purchase or lease trucks and pay for other expenses. 

There are different ways to finance your trucking business. You can opt for loans from traditional lenders, venture capitalists, or alternative financing. To help you decide, here are four types of loan programs every trucking business owner should consider.

1. Invoice Financing

Invoice financing involves the selling of outstanding trucking invoices to a factoring company. In this way, you’ll receive 80% to 90% of the total invoice value upfront and you won’t have to wait for 30, 60, or 90 days to get paid.

Unlike traditional loans, you won’t have to borrow money because the money is yours to begin with; you’re just advancing it.

Once your customers pay their invoices to the factoring company, the factoring company will then give you the remaining percentage minus a transaction fee. 

  • Facilities from $25,000 to $5,000,000
  • Rates starting at 0.75% per 30 days
  • Non-notified programs available
  • All Credit Scores Considered
  • Must be B2B Industry
  • Funding in 24 to 28 hours
  • Progress billing is okay

2. SBA Loans

The Small Business Administration’s (SBA) goal is to help small business owners secure bank rate financing by guaranteeing up to 85% of the total loan amount. This incentivizes lenders to fund your trucking business regardless of the assurance of repayment. 

Contrary to what most people assume, the SBA is not the one that provides the funding. They merely offer a guarantee for the borrowers and peace of mind for the lenders.

SBA-approved banks and financial institutions offer SBA loans for small business owners. Check your preferred lending institution and see if they offer SBA loans. One of the major disadvantages of these government loans is the long and stringent underwriting process.

  • Rates from 5.25% – 7.75%
  • Loans from $100,000 to $5,000,000
  • 10 – 25 Year Loan Terms
  • Closing within 45 – 60 days
  • No Collateral Programs Available!
  • Purchase Real Estate, Refinance Debt,
  • Purchase Equipment

3. Equipment Financing 

Equipment financing is one of the most common loans trucking business owners apply for. If you need to acquire brand new vehicles, equipment financing is the best option for you.

This type of financing is best used if you want to expand your fleet of vehicles by replacing or adding more trucks and trailers. Most business owners use it to finance expensive purchases that need long-term financing with affordable interest rates and flexible terms. 

With equipment financing, the vehicles you’re going to purchase serves as collateral for the loan. This means lenders are able to offer lower rates than usual.

However, lenders may ask you for a down payment before approving your loan. If you don’t have the means to pay for the down payment, you can check out equipment leasing. 

  • Rates starting at 6%
  • 2 – 6 Year Terms
  • Application only up to $250,000
  • All Credit Scores Considered
  • 24 Hour Application to closing!
  • New or Used Equipment
  • Programs up to $5,000,000 available

4. Business Line of Credit

Trucking business owners know that there are many factors that affect budgeting and working capital. Fluctuating fuel costs, changing economic climates, and other costs can influence business expenses.

Having a business line of credit gives you the flexibility to borrow money as needed.  Business owners apply for a business line of credit as a financial safety net for their business whenever unforeseen expenses arise. 

Once qualified, lenders will give you a credit limit and you can withdraw money from it whenever you need to. The credit limit assigned to you depends on a number of factors, such as market value, risk assessment, and profitability, among others. A business line of credit is comparable to a credit card because it’s revolving. 

  • Rates from 7.65% – 23.99%
  • Facilities from $5,000 to $250,000
  • Low Document Requirements
  • Monthly or Weekly Repayment
  • Only pay for what you use!
  • No minimum utilization
  • 24-hour application to closing!

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