Commercial Truck Financing Fast: No Fluff, Just Facts

The biggest challenge with bad credit truck financing?

You may not like the terms very much.

The important thing is to compare those payments to the expected profit from use of the truck and ensure the transaction makes good business sense. 

In general, yes.

Many lenders have cancelled their long haul/ OTR (over-the-road) programs entirely, which means there are less choices available.

However, there are still many programs available to finance sleeper trucks. 

Click here to speak to someone and learn what programs may fit for you. 

Sometimes, if you have paid off trucks, trailers, or equipment, offering that equipment as collateral can help you qualify. 

Most programs require any collateral to be less than 10 years old, and worth at least $10,000.

Note that lenders will use the "liquidation value" to evaluate your equipment. That means doing a search of what similar equipment sold for at auctions - which is usually very different than the asking price at a retail lot. 

When you have bad credit, you may have to come up with a higher down payment than if you had good credit. 

This isn't always true. 

Established business with good credit sometimes have zero down payment (other than a $999 documentation fee).

With poor credit (and... it depends how poor) you may qualify for programs with minimal down (first and last payment). 

It's also possible that you only qualify for a program with very high down payment options (25% and up).

We have access to over 75 different commercial truck financing programs - so the easiest way to find out what your down payment would be is to talk to a representative. 

Three things will keep you from financing a truck. 

1. Overdue child support
2. Tax liens over $10,000 
3. Recent repossessions (<24 months) 

Startup businesses are much riskier to lend to than an established company. 

Some studies suggest that 80% of startup businesses fail within a year. 

So...

If your business is a startup (less than two years in business) - it's going to be more difficult to secure financing for a commercial truck.

That means: 

• Potentially higher rates
• Potentially higher down payments 
• Potentially harder to secure approval

There are options available for startup businesses to secure truck financing, though. It just may take a little bit more effort and/or a less attractive approval.  

Sleeper trucks are harder for a startup to finance than non-sleeper or "vocational" trucks. 

There are less lenders willing to finance a sleeper than other types of trucks, and the risk profile is higher. 

Higher risk means its going to be harder for a startup OTR deal to be approved - and you may see higher down payments and payment options with OTR versus vocational trucking. 

There is a wide range of down payment requirements for startup businesses financing a truck. 

In some (very rare) cases, a startup can get a truck with no down payment. 

Let's talk about OTR first, and then cover vocational trucking. 

OTR trucks are very rarely no/ low down payment. In the vast majority of cases you can expect to be asked for 10-20% down as a startup buying a sleeper. Lower credit scores could potentially mean higher down. 

Vocational trucks are similar, but tend to have lower down payments and can often see approvals asking for only first and last payment (3-5%) upfront, plus documentation fees.  

New businesses are risky.

Lenders have to price that risk in for businesses less than 24 months old. 

In some cases, a startup business where the owner has excellent credit may expect to pay more than an established business with decent credit. 

That's not always the cases though. 

Below is a calculator that shows estimated payments bases on different times in business and credit scores. 

Caution though - these are only estimates, meant to give you a general idea. Your actual approval may be better - or worse - than the numbers this calculator spits out. 

Did you know...

... roughly 40% of truck loan defaults are due to equipment breakdowns?

(Meaning... someone stops making their payments because their truck broke and they can't afford to fix it...)

So...

...in many cases it can be difficult to secure financing for older or high mileage trucks. 

(But not impossible...) 

We work with more than 20 lenders and have over 75 credit lines available - and have financed many older/ higher mileage vehicles. 

Find out if you qualify to finance an older or higher mileage vehicle. 

OTR trucks are harder to finance across the board than other types of commercial trucks. 

That's especially true when the truck is older or has high miles. 

Startup businesses will have a particularly hard time financing sleeper trucks older than 10 years or with over 700,000 miles. 

There are definitely ways to get financed though. 

For sleeper trucks, age and miles can often be overcome if you have 3 or more power units (or 2 and buying a 3rd). Also if you've got 2+ years in business and solid bank statements. 

Non-sleeper trucks are easier. If you've got decent credit and time in business, there are multiple programs to take advantage of that have no age or mileage restrictions. 

Rates to finance a commercial truck vary tremendously. 

Things that make a difference:

• Long haul/ OTR versus other trucks 
• How long you've been in business
• Your personal and business credit
• The age and mileage of the truck(s)
• How many trucks you already own

With that said, it's very difficult to give a real answer (regardless of how many liars claim truck financing rates at 5% online...) 

Below is a calculator that can give you some idea - but it's nowhere near perfect.

The best way to determine what you would pay is to talk to us. 

Do you want to know one of the biggest challenges business owners face when financing a commercial truck?

Commercial financing rates are very different than consumer financing rates, which can create "sticker shock" when learning the payment terms on an approval. 

But... lenders have to incorporate the real risks of truck financing into the cost of financing a truck.

So... a "good" rate is a rate that makes good business sense. Will you make enough profit from the truck to justify the payment? 

If not, regardless of the rate, it's a bad business move. 

With numerous products to choose from, the range of possible down payments varies widely.

In some instances there is no down payment needed (other than documentation fees, which are usually $999), while in extreme cases down payments may be 30% or higher. 

For most transactions, 2 advance payments and documentation fees is what you can expect. 

Down payment will depend on truck age, mileage and valuation, as well as your time in business and credit profile.

Down payments are sometimes higher for long haul trucking, but not always. It just depends on the programs. 

Startup businesses (anything under two years) can generally expect higher down payment requirements for OTR trucks than other types of assets. 

In some cases, if you are presented with a high down payment, that can be overcome with collateral. 

If you own other trucks or business equipment (and don't owe any money on them) they can sometimes be pledged as collateral in lieu of a down payment.