The Best Tractor Unit Financing Options of 2022 – Forbes Advisor

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Reliable vehicles can make or break your profit margin in the commercial truck industry. However, with new tractor-trailers ranging in value from around $100,000 to over $200,000, most trucking companies have to borrow money to cover equipment costs. You may need to find reliable sources of financing for tractor units if you want to keep a fleet of trucks or yourself on the road.

The best financing options for tractor units

Wells Fargo truck loan

Good for: Multiple financing options

Why we chose it

Wells Fargo offers commercial transportation financing options starting at $100,000. You can use a Wells Fargo truck loan to buy or lease many different types of equipment (new or used), including trucks, trailers, tankers, tow trucks, etc.

Qualifying borrowers can get up to 100% financing. The bank also offers terms from 12 to 84 months for term loans, leasing, equipment credit lines, hire-purchase agreements, and other financing options.

For and against

US Bank truck loan

Good for: No deposit

The U.S. bank makes truck loans up to $1 million. Eligible borrowers can receive up to 125% financing, with additional funds available to cover costs such as taxes, installation fees and freight charges.

You may be able to get a commercial vehicle loan through the US bank with no down payment. Repayment terms range from 24 to 60 months or longer. The bank also offers applicants the opportunity to pre-qualify for truck loans of up to $500,000.

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Bank of America truck loan

Good for: Bad reviews

Bank of America offers loans and leases for the purchase of commercial equipment starting at $25,000. You can get terms of up to five years if you use business assets as collateral.

Fixed rates start at around 6% for qualifying customers. Business borrowers may also receive an additional rebate (0.25% to 0.75%) through the bank’s Preferred Rewards program.

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Balboa Capital truck loan

Good for: Financing same day

Balboa Capital offers alternative truck loans for borrowers who need financing to purchase trucks, trailers and other commercial vehicles. Depending on the type of security you need to offer and other qualifying factors, you may be able to borrow up to $500,000.

The lender requires borrowers to have a minimum FICO score of 620, which is considered a fair credit score. If the lender approves your application, you may be able to access the funds the same day you apply.

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First Capital Corporate Finance

Good for: startups

First Capital offers several commercial truck financing options to both established trucking companies and start-ups. The lender does not impose annual or mileage limits on vehicle purchases, and you may qualify for no down payment financing.

The online lender also works with personal credit scores as low as 620. However, the credit limits are more restrictive than elsewhere — ranging from $10,000 to $100,000. Remember that if you’ve been in business for less than two years, you can’t borrow more than $49,000.

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CAG Truck Capital: Good for bad credit

CAG Truck Capital is a private lender that provides commercial truck financing to borrowers with good or bad credit. If you are eligible for financing, you may be able to use a CAG Truck Capital loan to purchase a new or used semi-truck of any make or model.

The lender is willing to work with multiple credit challenges — including bankruptcy filings. However, you won’t find much information on the lender’s website about available annual percentage rates (APRs), repayment terms, or exact qualification requirements. Therefore, it’s important to compare any loan offer you get from other lenders to make sure you’re getting a good deal.

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Commercial Fleet Financing: Good for a quick approval

Commercial Fleet Financing offers equipment financing for trucks, trailers, vans, construction vehicles and more. Interest rates offered online are not disclosed, but repayment periods range from 36 to 108 months (three to nine years).

Depending on how long you’ve been in business, you may not be required to sign a personal guarantee – meaning you are personally responsible for paying off the debt if the company can’t – on a Commercial Fleet Financing truck loan. And if you’re borrowing less than $150,000, you don’t have to include tax returns with your loan application either.

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Truck Lenders USA: Good for multiple types of gear

TruckLenders USA offers financing for almost any type of commercial equipment – as long as it has wheels, has a valid title and is less than seven years old. Loans range from $15,000 to $250,000, and the lender’s jumbo leases are available for up to $1 million.

TruckLenders USA repayment terms vary from 24 to 60 months for borrowers with a minimum credit score of 675. Depending on the lender, you may also be required to make a small down payment. however, it does not specify how much.

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What is truck financing?

Truck finance is a loan or lease that allows you to break down the cost of a commercial vehicle over time. When you pay back the money you borrowed, you also pay interest and potential fees to your lender.

How does truck financing work?

Commercial truck financing is similar to a personal car loan in several ways. For example, most truck loans have fixed interest rates and fixed payments, just like car loans. In both cases, the vehicle you have purchased usually serves as collateral for the loan.

However, with trailer truck financing, you may be required to post a personal guarantee in order to qualify for a loan. Additionally, depending on the lender’s credit reporting policy, a truck loan can affect both your personal and business credit score.

Banks vs direct lenders vs alternative lenders

Several types of lenders offer commercial equipment financing. So if you need to secure a tractor trailer loan or lease, you have a few options to consider.

  • banks and credit unions can offer attractive interest rates and repayment terms. But good credit, more time in business, and higher annual sales might be required to qualify for these financing options.
  • Direct Lenders are companies with expertise in truck financing. These types of lenders may accept borrowers who would have a harder time qualifying for a bank loan. But it’s important to compare interest rates, fees, and other terms to find the most affordable financing solution.
  • Alternate Lenders are often online with no brick and mortar branches that you can visit. Although they don’t have specific truck financing expertise, potential borrowers who value online-only banking may prefer this type of lender.

How to get truck financing

Finding the best financing solution for your trucking company is a multi-step process.

  1. Check your credit. Most lenders will check your credit report and credit history when you apply for a truck loan or lease. Knowing the condition of your loan in advance can help you narrow down which financing options are available to you.
  2. Compare lenders. Take the time to compare multiple lenders and loan offers. Pay close attention to interest rates, fees, loan amounts, and other details to find the best deal.
  3. Get pre-approved. Next, check if a pre-approval option is available. Getting pre-approved allows you to find out what interest rates and terms the lender can offer you and whether you’re likely to qualify.
  4. Apply. When you fill out an official loan application, be prepared to provide information about yourself and your business, as well as details about the vehicle you wish to finance. You may also be required to submit documentation to verify that the information in your application is correct, e.g. B. Tax returns, bank statements (business and private) etc.

Find the best small business loans of 2022

Frequently Asked Questions (FAQs)

Can you finance a trailer truck with a bad credit rating?

Some lenders may be willing to offer truck financing to borrowers with bad credit. But you should expect to jump through more hurdles and pay more for funding in these situations.

Is it better to lease or finance a trailer truck?

Whether you lease a tractor trailer or take out a loan, you need to factor monthly payments into your business budget. The best option for your business depends on factors like cash flow, future business plans, planned vehicle usage, and more.

What credit rating do I need to finance a semi-trailer truck?

Lenders set their own requirements when it comes to minimum credit scores. You may be able to finance a trailer truck with a credit score below 600 with some lenders, while others might require a credit score in the mid to high 600 range.

Where can I get semitrailer financing without a down payment?

It’s not impossible to find lenders that offer no down payment truck financing, including some of the financing options listed above. However, you may need to meet other requirements to qualify for no down payment financing, such as: B. a higher minimum credit score, more time in business, etc.


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