Compare business loans for trucking companies

Discover the different ways you can finance your trucking company.

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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.

In this guide, we take you through different financing options for trucking companies, how to compare lenders, plus some great tips to get you through the process.

Lending Loop Business Loan

  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $500,000
  • Interest Rate: Starting at 5.9%
  • Requirements: Annual business revenue of at least $100,000, at least 1 year in the business, minimum credit score of 600+
  • Borrow up to $500,000
  • Online loan application
  • Receive personalized interest rates

Lending Loop Business Loan

Lending Loop offers personalized loans up to $500,000 for small business owners who have been in business for at least one year and can show an annual revenue of at least $100,000.

  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $500,000
  • Interest Rate: Starting at 5.9%
  • Requirements: Annual business revenue of at least $100,000, at least 1 year in the business, minimum credit score of 600+

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 the lender who’ll then receive the full amount from your customer when the invoices are fulfilled. The lender will take a percentage of the invoice.
  • 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 new trucks and 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 terms of up to 20 years, with lenders offering amounts as little as $1,000 and as high as $1.25 million.
  • Canada Small Business Financing Program (CSBFP) Loans. Find competitive rates with a Government-backed loan designed to help startups and small businesses that might struggle to qualify for other financing. If you meet the requirements, these loans are easier to qualify for since they’re at least 75% backed by the Government. Provided by banks and other financial institutions, your business will need to bring in an annual revenue of less than $10 million to qualify.

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 to choose the best one for your needs. Certain loans will offer a larger amount of funding, while others will offer a specific type of funding such as an equipment loan. Invoice factoring could be used for a wider array of purchases, while equipment loans are limited to purchasing equipment.

Another factor to consider is the 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 a few months. Equipment and general purpose loans may be paid off over longer periods of time, such as five to 20 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 – instead, compare APRs. The annual percentage rate, or APR, will show all upfront costs including origination fees, application fees and the interest rate. However, it won’t include other fees like early repayment and late payment 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

Name Product Interest Rate Min. Loan Amount Max. Loan Amount Loan Term Minimum Revenue Minimum Credit Score
SharpShooter Funding Business Loan
5.49% - 22.79%
6 months - 5 years
SharpShooter Funding offers loans up to $300,000 for small business owners who have been business for at least 100 days and can show a minimum of $5,000 in monthly deposits ($60,000/year).
Lending Loop Business Loan
5.90% - 26.50%
3 months - 5 years
Lending Loop offers personalized loans up to $500,000 for small business owners who have been in business for at least one year and can show an annual revenue of at least $100,000.
Company Capital Business Loan
7% - 29%
3-18 months
Company Capital offers business loans of up to $100,000 to small business owners who have been operating for at least 6 months and can show a minimum of $5,000 in monthly revenue.

Compare up to 4 providers

Representative example: Kenji buys a fleet of trucks for his shipping business

Kenji, a resident of Ontario, runs a shipping company and is looking to replace six 2014 Isuzu NPR HD diesel trucks with new ones. He finds a 2020 model with a 14′ box priced at $76,500.00 per truck. Kenji is able to trade in his old Isuzu trucks for $11,500.00 each ($69,000.00) and makes an additional 20% down payment of $91,800.00 on the new trucks. He applies for a business loan to cover the remaining amount of $298,200.00 plus 13% HST on the purchase price less the trade-in values.

Both Kenji’s business and personal credit scores are solid, plus he can secure the loan with some of his other business assets. He is therefore approved for a loan with competitive terms. Along with the cost of the loan, he also pays around $1,800.00 to register all 6 trucks with the province of Ontario – this includes the cost of license plate stickers and vehicle permits (he can reuse the plates from his old trucks, so he doesn’t need to buy new ones).

Purchase price of new truck$76,500.00 per truck ($459,000.00 for 6 trucks)
Loan typeBusiness loan (term loan)
Loan amount$348,900.00
Interest rate (APR)7.90%
Loan term5 years
Additional fees3.00% origination fee ($10,467.00)
Monthly payment $7,057.75
Total loan cost$423,465.00

*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.

What do I need to apply?

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

  • Current truck ownership and registration information. You may be required to show proof of your business assets, as well as licensing and registrations for trucks that you already own.
  • 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, as well as show your plan to drive your business to success.
  • Personal documents. Personal identification documents such as your government-issued ID, Social Insurance Number (SIN), personal and contact details, 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 approved:

  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 the areas your business struggles with.
  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 certain types of loans, such as auto loans.
  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.

Haul your business to success with these six tips

  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 happening in the first place.
  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 – as long as it works for you.
  4. Fuel cards are your friend. It may be worth investing in fuel cards (also known as fleet cards) for your drivers or negotiating them into a deal with a factoring finance company. Potential savings of $0.07 per litre 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 business financing options and make the decision that’s best for your business.

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