Finance Your Dump Truck
How Much Down Payment Will You Need for Dump Truck Loans?
Down payment requirements for a dump truck totally depend on your situation. Sometimes you won’t need any down payment at all.
Most programs require a first and last payment upfront (this averages around 4% of the cost of the dump truck). Other programs may require 10, 25, or even 50% down payment to qualify.
- Established businesses with good credit rarely need more than first- and last- payment down.
- Established businesses with bad credit may need 10-20% down. It depends on how bad your credit is… and what your business looks like in terms of cash flow
- Startups with good credit can usually get by with 10% or less down
- Startups with bad credit will usually need 20-50% down
- With 50% down, you would only be turned down in the most extreme of circumstances
Of course, how much down payment you'll need depends on your specific situation. We can help you figure that out.
Dump Truck Leasing Vs. Financing
Here’s a question many of you ask:
“Should I do a lease or finance my dump truck?”
The difference between the two is what happens at the end. With dump truck financing, that means you make X amount of payments (usually between 24 and 72). On a lease, you’ll have a buyout at the end should you choose to keep the dump truck.
Dump truck leases usually have one of the following buyout options:
- 10% out – So if you bought a $50,000 truck, you’d have to pay $5,0000 at the end
- FMV (Fair Market Value) – you’d pay the average retail price of a similar dump truck in terms of year, make, model and mileage
- TRAC lease (Terminal Residual Adjustment Clause) – You’d pay a predetermined amount at the end – this amount varies by contract
A lot of business owners decide whether to lease or finance based on what their accountant says. (Always listen to your accountant).
With current tax law, when you finance you can choose to write off the entire purchase price immediately, while with a lease you write off all the payments.
Most of our customers finance.
Since dump trucks hold their value very well, you're likely to want to keep the truck at the end of the term.
Can You Finance A Used Dump Truck?
Financing a Dump Truck with Bad Credit
Dump financing with bad credit is harder than when you have good credit.
If a deal makes good business sense for a lender, bad credit can be overcome.
Our complete guide to bad credit dump truck financing goes deep, but here are some basics:
Bad credit + startup + no down payment = no financing
If you have at least one of the below items, bad credit can often be overcome:
- Large down payment
- Good cash flow
- Lengthy time in business (5+ years)
When you finance or lease a dump truck with credit issues, you can expect higher payments and shorter loan lengths than when your credit is good.
(The guide we mention above covers this in depth).
Can Startup Businesses Finance a Dump Truck?
Startup financing is trickier than when your business is established. A large percentage of businesses fail within the first two years.
Here are some ways a new business can secure financing for a dump truck:
- If you have good credit (650+ FICO for some programs, 700+ for others) there are several programs that you may qualify for
- Bonus points if you are a homeowner
- Bad credit programs for startups tend to have higher down payment requirements – anywhere from 20-50%
We have a guide to dump truck financing for startups that covers the requirements in depth.
Financing a Dump Truck Without a CDL
We are often asked if someone without a CDL can finance a dump truck.
The answer is yes… but it depends on the situation.
Established businesses with decent credit can generally finance whatever they need if it is essential to the business.
Equipment financing companies tend to be skeptical of “investor deals.” Investor deals are where someone who has no experience in trucking or construction wants to finance a dump truck and have someone else drive it. Then they can just sit back and collect checks.
People with experience will tell you… its not as easy as it sounds.
We also often see “straw purchases.” This is where someone has lousy credit, so they find someone with good credit to finance a dump truck in their name. The business is put in the name of the person who has good credit but is run by the person with the lousy credit.
While we don’t do straw purchases, often we can help you figure out how to structure the business properly so you’re not being dishonest.
Dump Truck Financing Rates
This is a complex subject – we have a handy guide to rates for dump truck financing.
Here is a simple version:
Imagine you’re buying a $50,000 dump truck.
What would the payments be?
Your best-case scenario (i.e. if you’ve got time in business and good credit) is a 60-month term at around $1,025 a month.
The worst you could do?
If things are really messy you may have to put $25,000 down and then you’d have payments around $1,200 a month (for 36 months).
Most people won’t qualify for the very best financing…
…and most people won’t be stuck with the very worst option either.
That was a lot, wasn’t it?
It surprises many people how much actually goes into figuring out what you’ll qualify for if you need to finance a dump truck.
Want to get real answers about your unique situation so you can make real decisions about your business?
Give us a call at (866) 631-9996 or click below to get started.