Business Loans For Trucking Companies

Business Loans For Trucking Companies
Ronis Gracie
on January 25, 2017
Read in 1 min

It doesn’t matter whether the economy is on an upswing or not, people and businesses will always need a way to transport goods. Subsequently, owning a freight trucking business can be very profitable for you.

From time to time, you’ll need to eat into some of those profits in order to repair or even replace your trucks. Moreover, careless employees may damage equipment or even quit unexpectedly and leave your freight business struggling financially.

When needs compete with profits, it’s time to consider a business loan.

Types of Loans for Trucking Businesses

Trucking business owners must think about their credit history, business history, cash-flow and repayment time-frame.

Small Business Loan

This type of secured loan is backed by government agencies and provided by private lenders. Interest rates are usually below 10 percent. For trucking companies needing to purchase multiple trucks or pay for expansions, a small business loan is a good option. Repayment terms can last up to 20 years, and it is possible to finance a considerable amount of money.

Merchant Cash Advance

For a sudden financial emergency, a cash advance is a good option. Fees can run very high so this form of financing only makes sense if it can be quickly repaid. The main benefit of this type of loan is having the cash instantly regardless of credit history. Use a merchant cash advance only for emergencies.

Working Capital Loan

Regular income is considered the collateral asset with this secured loan. For this reason, you don’t necessarily need to have perfect credit in order to get approved. With interest rates typically falling somewhere between 5 percent and 7 percent, trucking businesses can benefit from a short-term working capital loan.

Line of Credit

If a trucking company wants financing without pledging collateral, a line of credit is a good option. Interest rates may vary, but it’s possible to receive up to $200,000 in funds.

Qualifying for A Trucking Business Loan

In high-risk industries like freight transport, acquiring loan funds can be notoriously difficult. Common obstacles faced by trucking business owners seeking a loan may include the following:

Insurance Requirements

It’s extremely important to have adequate and updated insurance on all trucks and inventory. Not only is this going to mitigate your business risk, but lenders are more likely to offer business loans to trucking companies that have great insurance.

Monthly Revenue Minimums

For optimal financing options, you’ll want to show a minimum of about $8,000 in revenue each month. This is important for almost all types of loans: you must demonstrate your ability to repay the loan.

Business Credit History

It’s also important that you’ve been in business for at least 6 months because an established business history helps tremendously.

Trucking businesses that meet these qualification criteria can receive financing very quickly. Even if your business doesn’t meet all of the requirements listed above, you should be able to obtain a personal loan for business with decent personal credit.

Ronis Gracie Finance Journalist

A serial entrepreneur experienced with building several small companies from the ground up and consulting for many others, Ronis understands the finer points of small business financing. He’s passionate about small business & is committed to simplifying small business lending for others.

Featured

9 Ideas on How to Build Business Credit Fast

by Taylor Gordon on June 6, 2017
If you want to learn how to build business credit to access better financing options, this is the article for… Read more

Minority Business Loans – Discover 36 Opportunities Here

by Taylor Gordon on May 15, 2017
You may be searching for minority business loans because you have an idea for a great new business. Or perhaps… Read more

Small Business Loans for Women – Compare 38 Options in One Place

by Rebecca Hosley on May 15, 2017
When it comes to small business loans for women, knowledge is power. Women are not new to entrepreneurship, but they… Read more

Debt Service Coverage Ratio Explained in Acute Detail

by Amy Fontinelle on May 10, 2017
Sara owns a thriving restaurant, and she thinks the time is right to expand. Specifically, she wants to expand the… Read more

Microloans: What They Are & How To Take Advantage

by Eric Goldschein on May 1, 2017
Microloans refer to a category of financing where you can qualify for short-term working capital (or even start up capital) with low… Read more

How to Calculate ROI – Making Your Small Business Loan Count

by Dustin Clendenen on April 24, 2017
Here's a controversial thought: Not all debt is bad debt. Since not all of us are independently wealthy or particularly… Read more

Small Business Funding – Debt Financing vs Equity Financing

by Rebecca Hosley on April 22, 2017
Everything You Need to Know About Small Business Funding in 2017 Deciding to start your own business is a huge… Read more

Small Business Loans for Veterans – A Definitive Guide to VA Business Loans

by Eric Goldschein on April 7, 2017
Small business loans for veterans are available through various channels and are also often supplemented with business development tools. Business… Read more

EMV Compliance: The Good, The Bad, & The Ugly

by Amy Fontinelle on March 7, 2017
As a savvy business owner that accepts credit and debit cards, you should aleady know the dangers of failing to upgrade… Read more
Join For Free & Start Browsing Loans