Compare business loans for trucking companies

Time, unyielding effort and an incredible amount of coordination are necessary to keep a trucking company moving forward. Licensing, insurance, vehicle maintenance, drivers, tolls and new trucks all cost money, and the quality of each impacts the bottom line. Comparing all of your financing options and making the choice that’s best for your needs can make or break your profits.

This guide will take you through financing for trucking companies, how to compare lenders, and some great tips to get you through the process.

What business loan options should I consider for my trucking company?

Trucking companies tend to do big freight deliveries and charge customers large amounts at a time. With this type of revenue model, you might have a good portion of your business income tied up in invoices. That’s why we’ve listed two types of accounts receivable financing options as the first to look into.

• Invoice factoring. By selling your open invoices at a slight discount, you can receive cash from certain lenders who’ll then receive the full amount from your customer when the invoices are fulfilled.
• Freight factoring. This is a type of invoice factoring designed specifically for trucking companies. You sell your invoice to the lender in exchange for receiving a percentage of the invoiced amount more quickly.
• Equipment loans. As the name indicates, these loans are specifically for equipment. You could use an equipment loan to finance trucks, trailers, repair equipment and more.
• General purpose business loans. Use these loans for a wide variety of purposes so long as they’re related to business operations. General purpose loans typically come with fixed terms of up to five years.

How do I decide which loan type is best for my business?

Now that you know your options, it’s time to figure out how to sort through them. Certain loans will offer a larger amount of funding. An equipment loan may offer a larger amount of financing than invoice factoring, for example. But invoice factoring could be used for a wider array of purchases versus equipment loans that are limited to purchase equipment.

Another factor to consider is loan term. Terms can vary among financing options. Invoice factoring has a finite term, and is paid off as soon as the invoices are paid — usually within a few weeks to months. Equipment and general purpose loans may be paid off over longer periods of time such as five or more years.

Lastly, be sure to consider fees and costs. The interest rate won’t be your only cost and might not be the best factor to show the cost difference between loan types with varying repayment terms. Look out for origination, prepayment, late payment and application fees. While you’d be hard-pressed to find a business loan that doesn’t charge additional fees, you may have an easier time finding ones with more reasonable penalties than others.

Compare business loans from top providers

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Name	Product	Filter Values	Loan amount	Starting APR	Requirements
Lendio			$500 – $5,000,000	6%	Operate a business in the US or Canada, have a business bank account and have a personal credit score of 675+.	Submit one simple application to potentially get offers from a network of over 75 legit business lenders.	Check eligibility More Info		loading Fetching your data...
SmartBiz			$30,000 – $5,000,000	4.75%	650+ personal credit score, US citizen or permanent resident, 2+ years in business, $50,000+ annual revenue, no outstanding tax liens, no bankruptcies or foreclosures in past 3 years	Get funding for your small business with a government-backed loan and extended repayment terms.	Check eligibility More Info		loading Fetching your data...
Fundera			$2,500 – $5,000,000	7%	$300,000+ of annual revenue, 680+ personal credit score, in business for 3+ years	Get connected with short-term funding, SBA loans, lines of credit and more.	Check eligibility More Info		loading Fetching your data...
Credibly Business Loans			$5,000 – $250,000		6+ months in business, $180K annual business revenue, 500+ credit $15K+ in monthly deposits	Funding to cover business expenses with daily or weekly repayments.	Check eligibility More Info		loading Fetching your data...
LendingClub small business loans			$5,000 – $500,000	9.77%	12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better	With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.	Check eligibility More Info		loading Fetching your data...
Main Street Finance Group Business Loans			$5,000 – $1,000,000	Varies	1+ years in business, $10,000+ monthly revenue	Apply online and get approved within hours with minimal paperwork. Multiple financing options available.	Check eligibility More Info		loading Fetching your data...
Monevo Business Loans			$500 – $100,000	3.99%	Credit score of 500+, legal US resident and ages 18+.	Use this connection service to get paired with a loan you can use for business.	Check eligibility More Info		loading Fetching your data...

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What do I need to apply?

Each lender will have its own requirements, and some have more than others. Below you can find a package of the most common documents you’ll need to apply for financing:

• Current truck title and registration information. You may be required to show proof of your business assets, and titles and registrations for trucks that you already own can be an easily verifiable option.
• Proof of business income. Certain lenders will require a minimum monthly revenue, but almost all reputable lenders require proof of income for approval.
• Business plan. Detailed and clear business plans can help boost your chances of securing financing for your trucking company. By showing a clear vision, you can sell your potential to pay off the amount you’re looking to borrow.
• Personal documents. Personal identification documents such as your state-issued ID, Social Security number, and information about your personal finances are likely necessary to complete your application.

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

While there’s no way to guarantee approval, try these four tips to 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 put down 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.

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.

Bottom line

Your next cash flow 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 options and make the decision that’s best for your business.

Frequently asked questions

• How long does it take to get financed?

  Several factors contribute to the length of time it will take. The amount of funding, the type of loan, and your credit history are just a few of the potential reasons your loan may take more or less time to get. There are companies that specialize in quick loans, but they may not be what your particular business needs.

• Do I need good credit to qualify for financing?

  Not necessarily. Many business lenders will require good to excellent credit. But if you have established revenue and have been in business for several years, you may be able to qualify with bad credit. Each lender will have its own criteria that an applicant must meet.

• Can I be financed with only one truck?

  Possibly. There are lenders that may be able to provide you with financing if you’re only operating a single truck. A business plan may be considered especially important in these cases.