Financing EV Chargers for Business: A Practical Guide
Electric Vehicle (EV) chargers are becoming more common – and it’s happening fast.
They serve as...
Dump Truck Loans: Down Payment Requirements
Are you wondering how much you’ll have to put down when you finance a dump truck?
We talk to maybe 50 people a month about dump truck financing – and down payments are usually the first or second thing asked about.
Want to know what we tell them?
Average Dump Truck Down Payments
Down payments on a dump truck range from zero to fifty percent. It really depends on your situation. In general, the higher amount of risk you are to a lender, the higher you can expect your down payment to be.
Here’s what can affect the down payment needed for dump truck loans:
- How long you’ve been in business
- How good or bad your credit is
- The age and mileage of the vehicle you want
- Your cash flow and bank balances
- The amount you’re looking to borrow
Dump Truck Down Payments for Startups Vs. Established Businesses
If your business is established (2+ years) and you have good credit, you can usually expect any down payment requirements to be minimal.
Down payments can be zero, five percent, or in some cases you may even defer payments for 90 days.
Most dump truck financing programs require 2 payments in advance – so on a $50,000 dump truck you would expect to need $2,100 or so – or about 4%.
If you don’t have very good credit… you might expect a higher down payment.
It depends on how deep your credit issues are – and how long you’ve been in business.
Many credit portfolios weight time in business heavily.
Even with a lower FICO (600 or so) you might get away with a lower down payment if your business is very well established. (5 or more years).
That’s not always the case… here are some things that will keep you out of the running for those lower down payment options:
- Repossessions
- Recent bankruptcy (discharged within 3 years)
- Accounts currently past due
If you don’t qualify for a no-to-low down payment option, down payments can range from 10 to 50 percent – depending on some factors that we’ll cover in a second.
Now… for startups (any company with less than 2 years in business) the options are a little different.
There ARE programs available for startups that only require 2 advanced payments. For these programs you’ll usually need a 640-credit score or higher. Also, most of these lower-down programs only have a maximum $50,000 limit for startup businesses buying dump trucks.
With better down payments, you can get into a more expensive truck (if your credit is good). With 5%-15% down, there are programs that will advance $150,000 or more to well qualified startup businesses.
Starting a business with poor credit?
You’ll need a hefty down payment to get into a dump truck. (at least 20%...)
Down Payment Needed on Older Dump Trucks
Many of the programs in the marketplace require dump trucks to be 10 years old or newer.
With reasonably good credit, however… there are many programs that don’t care about age or mileage for trucks.
(Yes, you could finance or lease a 1998 Kenworth with 800,000 miles, for example…)
Further, with higher down payments, age and mileage won’t matter as much (unless the truck is extremely overvalued).
Bottom line: Usually there’s a program out there for any reasonable truck of any age.
How Much Money Does My Business Have to Make?
Usually…
If you have good credit…
Nobody even looks at your bank statements.
Now… if you have great statements (steady revenues and reasonable ending balances) they can help you get a better approval… but they are totally un-needed.
If your credit is weak, but your business is strong – that’s when looking at bank statements can really help you stay out of the higher-down payment programs.
There are no “set-in-stone” rules… but being able to prove you have a solid business in place can help you avoid many of the programs that require 25% and more down.
