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Best financing options for the trucking industry

The best type of financing for your trucking company depends on what you need to fund. But certain types of financing like equipment loans and factoring can meet the most common needs in the industry. You may want to consider all of these options before you apply for a loan.

• Equipment and vehicle financing
• Factoring
• SBA loans
• Term loans
• Lines of credit

We also selected a best lender for each type of financing, based on factors like rates, terms and fees compared to other similar products. We focused on choosing lenders with a fast turnaround time compared to similar providers. And we made sure all are willing to work with the trucking industry.

Equipment and vehicle financing

A good choice for when you want to buy a new semi, trailer or straight truck is equipment and vehicle financing. When it comes to truck financing, you can usually get between 80% and 100% of the vehicle’s value. The bigger the down payment you make the better the deal you can get.

Since most auto loan providers don’t offer financing for trucks, you’ll have to look elsewhere. Equipment loans from a lender that works with a high-risk industry or companies that specifically offer financing to trucking companies are your two main options.

National Funding business loans

Finder score: 4.65 / 5 ★★★★★

National Funding has a special financing program for trucking companies. Apply for up to $500,000 in small business loans and up to $150,000 in equipment loans and leases. Because it also works with other lenders, you can likely find funding through National Funding even if you have fair credit. But it doesn’t advertise the cost of its loans online and can charge daily repayments on its term loans.

• Pros and cons

  Pros

  • Next-day funding available
  • Special program for trucking industry
  • Low minimum credit score

  Cons

  • Doesn&rsquo
  • t disclose costs online
  • Some loans have daily repayments
  • Might send you to a partner

• More details

  Loan amount	$5,000 – $500,000
  APR	Starting at 6.25%
  Min. Credit Score	600
  Loan term	24 to 60 months
  Requirements	In business 6+ months and make at least $250,000 in annual sales. Other loan types have additional requirements.

Loan amount	$5,000 – $500,000
APR	Starting at 6.25%
Min. Credit Score	600

Factoring

Factoring involves selling your unpaid invoices to another company at a discount to cover overhead costs while you’re filling an order. Typically the factoring fee depends on your client’s credit and how long they take to pay their invoices.

Invoice factoring companies offer this service to businesses in general, while freight factoring offers this service specifically for the transport industry. Both can be expensive compared to other loan options, so save it for when you’re out of other options.

Fundbox lines of credit

Finder score: 4.2 / 5 ★★★★★

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While technically not a factoring company, Fundbox offers lines of credit based on unpaid invoices to businesses in most industries — including trucking. It offers lower rates than you might find at a factoring company and accepts businesses that have been around for as little as six months. But you must use the right type of software to qualify, and you’ll have to make weekly repayments.

• Pros and cons

  Pros

  • No credit or time in business requirements
  • Has experience with trucking industry
  • Low-cost alternative to factoring

  Cons

  • Weekly payments Must use eligible accounting software
  • Longer terms come with higher rates

• More details

  Loan amount	$1,000 – $150,000
  APR	Not stated
  Min. Credit Score	600
  Loan term	12 or 24 weeks
  Requirements	6 + months in business, $100,000+ in annual revenue, 600+ credit score

Loan amount	$1,000 – $150,000
APR	Not stated
Min. Credit Score	600

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SBA loans

These government-backed loans are designed to help businesses that can’t qualify for bank financing access low-cost loans. Trucking companies might want to consider the following SBA programs:

• SBA 7(a) loans offer up to $5 million in government-backed financing for just about any purpose, including hiring more drivers or buying new technology to improve logistics.
• SBA microloans offer up to $50,000 for any business use, excluding real estate. These can be a good choice for owner-operators who can’t qualify for a 7(a) loan.
• SBA 504 loans offer over $5 million in financing for real estate and equipment purchases. These can be a good option for buying a fleet of 18-wheelers or setting up a new terminal for a fleet.
• SBA CAPlines offer lines of credit to cover working capital. Contract CAPlines can be particularly useful, as they offer a cheaper alternative to invoice financing.
• SBA Community Advantage loans offer general-use term loans to trucking companies located in underserved areas and markets. These can be a good option if you have bad credit or low revenue.

SBA loans might come with lower rates than most options available to trucking companies. But they can take over a month to fund and can still be difficult to qualify for.

SmartBiz business loans

Finder score: 4.5 / 5 ★★★★★

SmartBiz is an online service that can connect your trucking company with an SBA lender. It also offers packing services to speed up the application. They aren’t free, but the overall cost could still be lower than factoring or other types of short-term financing. SmartBiz can also connect your business with trucking-friendly banks that offer term loans and lines of credit.

• Pros and cons

  Pros

  • Cuts down on application time
  • Only works with SBA-preferred lenders
  • Traditional bank loans available

  Cons

  • Charges packaging and referral fees
  • Can take up to 30 days
  • Requires 650 credit score or higher

• More details

  Loan amount	$30,000 – $500,000
  APR	11.25% to 12.25%
  Min. Credit Score	650
  Loan term	10 to 25 years
  Requirements	650+ credit score, 2+ years in business, $50,000+ in annual revenue, no bankruptcies or foreclosures in past 3 years

Loan amount	$30,000 – $500,000
APR	11.25% to 12.25%
Min. Credit Score	650

Term loans

Term loans give your business financing all at once, which you repay plus interest in installments — with or without collateral. Since lenders consider trucking to be a high-risk industry, you may want to consider alternatives to bank term loans.

• Short-term loans offer your business financing that’s typically due within a year. These can have rates over 100% APR and come with daily or weekly payments. But they often have few to no credit requirements.
• Online term loans often don’t require collateral and typically have terms as long as five years with rates that average at around 80% APR. Online lenders sometimes work with fair credit scores as low as 580.

Both can get you financing within 24 hours and usually don’t require more than a year or two in business. But they’re often expensive compared to other options — especially SBA loans. Like invoice financing, short-term loans in particular should be reserved for emergencies.

Fora Financial business loans

Finder score: 4.1 / 5 ★★★★★

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Fora Financial is a short-term lender that charges a fixed fee instead of interest — with a discount for early payments. You only need to have six months in business to qualify. And it works with most credit types. But it can take up to three days to receive your funds, which is slightly longer than similar lenders. It also isn’t very transparent about costs on its website.

• Pros and cons

  Pros

  • Only requires six months in business
  • Early payment discount
  • Accepts bad credit

  Cons

  • Doesn&rsquo
  • t disclose costs online
  • May come with daily or weekly repayments
  • Can take three days to fund

• More details

  Loan amount	$5,000 – $1,500,000
  APR	Varies
  Min. Credit Score	500
  Loan term	4 to 15 months
  Requirements	6+ months in business, $15,000+ gross monthly sales, no open bankruptcies

Loan amount	$5,000 – $1,500,000
APR	Varies
Min. Credit Score	500

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Lines of credit

Lines of credit offer your business access to cash for working capital and unexpected expenses. Having an open credit line can be a good way to avoid short-term loans in an emergency. Like with term loans, online lenders can be a good choice for the trucking industry, since you might struggle to qualify at a bank.

OnDeck business lines of credit

Finder score: 4.7 / 5 ★★★★★

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OnDeck is an online lender that offers short-term loans and lines of credit. You can qualify with fair credit, and only need to be in business for one year. It also offers discounts for repeat customers, so it could be a good solution if you regularly find yourself in need of financing. But you may have to pay a monthly maintenance fee on the credit line. And it charges weekly instead of monthly payments.

• Pros and cons

  Pros

  • Only requires 625 credit score
  • No draw fees
  • Only requires one year in business

  Cons

  • Can take up to three days to fund
  • Weekly payments
  • Monthly maintenance fee

• More details

  Loan amount	$6,000 – $100,000
  APR	29.9% to 65.9%
  Min. Credit Score	625
  Loan term	Up to 12 months
  Requirements	Companies in business at least 1 year, $100,000+ in gross annual revenue, majority owner with a 625+ personal credit score, active business checking account

Loan amount	$6,000 – $100,000
APR	29.9% to 65.9%
Min. Credit Score	625

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Can my trucking company qulaify for financing?

Each lender has different requirements. In most cases, you’ll need to meet the following requirements — though there are still options if you don’t meet all of them.

• 600 credit score or higher
• One or more years in business
• At least $100,000 in annual revenue
• US citizen or permanent resident

If you want to apply for an SBA loan, you often need to have a credit score of at least 620 and have at least three years in business.

How do I increase my chances of approval for a business loan?

While there’s no way to guarantee approval for your trucking company. In fact, no legitimate lender should guarantee approval for a trucking loan before looking at your finances. But these four tips can improve your chances of getting your application across the line.

1. Have adequate revenue history. While a history of success is not a guarantee of future success, it’s a valuable indicator to most lenders.
2. Highlight your business’s features, but be truthful about shortcomings. No business is perfect, and it’s much better to establish trust with your lender by being honest about your trouble areas.
3. Your down payment will change with your experience. Your business history may determine how much you’re required to pay as a down payment for your loan.
4. Find a lender that works with the industry. Experts understand the field better, and can better identify a good business history or plan from a lousy one.

Can I get a trucking loan with bad credit?

Yes, you can get a business loan for your trucking company with bad credit. These tips can help you get approved.

• Make the highest down payment you can afford when applying for equipment and vehicle loans. The larger the down payment, the
• Consider SBA Community Advantage loans, which are often available to business owners with bad credit.
• Trade in old vehicles and equipment – and know the trade-in value by looking it up on sites like the Kelley Blue Book.
• Consider factoring if you need working capital, which doesn’t rely on your credit score.
• Make quick fixes to your credit score by checking your credit report for mistakes and signing up for services that report monthly bills to credit bureaus for a few extra points.
• Apply for secured term loans and lines of credit if your company has enough real estate, trucks and other assets that you’ve already paid off.

Read about our top picks for bad credit business loans to learn about more options that may be available to your company.

Make a haul with these 6 tips to run a successful fleet

1. Check load boards. Whether you’re just starting to find clients or you’re looking to fill out a schedule, load boards can help. Load boards are marketplaces where companies can find customers looking to transport freight.
2. Invest in great equipment and maintain it. Once you get the best truck you can afford, make sure you keep on top of maintenance. Regular maintenance can help cut the cost of potentially expensive repairs by preventing them from ever occurring.
3. Buckle down on your plan. Don’t just use the business plan as a way to get financing. Build your company a roadmap to success and stick to it.
4. Fuel cards are your friend. It may be worth investing in fuel cards for your drivers or negotiating them into a deal with a factoring finance company. Potential savings of $0.20 per gallon at the pump can add up quick, and getting the fuel cards before the haul can keep your cash flow in the positive.
5. Bid smart. Make sure to read and reread the proposal before you make your bid. Itemizing all of the potential expenditures and variables can help you avoid undercutting yourself.
6. Strive for the highest customer satisfaction. Internal and external customers should be left as happy as possible as often as possible. Whether it’s a dispatcher contacting a truck or a client contacting your sales rep, make sure your employees are trained on how to deliver the best experience.

Summary of trucking company loans: Compare the best options

Bottom line

Your next cashflow solution or truck could be just around the corner. Take your time and review your finances, your business plan and your needs before settling with any one lender. Shop around, compare your business loan options and make the decision that’s best for your business.