If you’re an established owner operator or manage a small fleet and you’re looking to purchase a new truck, you have a few options for financing a truck, however just starting out, purchasing your first truck can be difficult due to lack of established business credit.
Lets begin with financing a truck for established businesses; funding new or gently-used semi truck purchases generally fall into 3 categories: cash purchase, loan, lease.
Buy A Big Rig With Cash
Whether you’re business is thriving or it’s a capital investment from your personal account or friends & family, throwing all-cash at a depreciating asset may feel good to have it paid off, however if it leaves you cash-poor, you’re missing opportunities to grow your business in other ways, instead tying your capital up to maintain the current business size. Even if you have a healthy bank account, maintaining that fund for a rainy day or for various growth strategies is an excellent option, while also putting a larger down payment down on your next rig.
Finance With A Semi Truck Loan
Rates are pretty favorable right now, so borrowing can be cheap and give you the cash flow flexibility you need to see a positive return on your investment. The challenges with a loan include borrower credit (corporate credit), vehicle age and mileage, and intended purpose. Many generalist lenders who aren’t familiar with the industry will have arbitrary rules in place for funding purchases of transportation equipment used for particular purposes. By choosing a truck and trailer finance specialist, you’re working with a team who understands your needs, cash flow potential, and can make a better assessment and recommendations for your loan.
Lease Your New Truck and Trailer
Similar to loans, leases rely on credit ratings and the current prime rate, however generally have a lower monthly bill and have a buy-out option at the end. The flexibility of new equipment at lower payments helps considerably during leaner times or when working capital is tied up in another venture.
Lease Purchase Programs are a helpful tool for both new owner operators as well as recruitment tools for larger fleets to bring new drivers to drive under their brand. A simple way of thinking of it is a new operator sub-leasing a truck from their