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How to Get a Commercial Truck Loan

Written by Banks Editorial Team

Updated May 23, 2023​

3 min. read​

Commercial truck loans allow business owners to purchase commercial trucks, and they work similarly to equipment financing loans.

If you are a business owner looking for commercial truck financing, this guide can help you find the right commercial truck loan for your needs to start or upgrade your business vehicle fleet.

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What Is a Commercial Truck Loan?

A commercial truck loan is a loan product that allows you to purchase commercial trucks or trailers for your business. The cost of a new commercial truck runs between $130,000 on the low end to up to $200,000 on the high one. If your business can’t afford to pay this sum upfront and you don’t want to consider a truck lease, a commercial truck loan may be the best way forward.

How Do Commercial Truck Loans Work?

A commercial truck loan is similar to equipment financing. This means that the requirements you will need to meet to get approved are similar to other small business loans. For example, you will have to provide your business tax returns, financial statements, and proof of revenue and years in business. Some lenders may require collateral against the loan, while others will not. Things like your credit scores may determine what interest rate you get. For example, bad credit will mean you will have to pay a higher interest rate, making the loan more expensive.

Apart from the common things required to qualify for other small business loans, lenders may also require proof of commercial truck license and insurance to apply for commercial truck financing.

Types of Truck Loans Lenders

As with most types of loans, there are a variety of lenders. From online lenders to traditional banks, you need to find the one that best suits your business needs. Before applying for a commercial truck loan, you may decide how much you want to borrow and your ideal monthly payments.

It’s also a good idea to have the documentation ready. Here’s a look at a few of the most commonly used truck loans lenders.

Traditional Banks

A traditional bank can offer you competitive interest rates and a fixed payment plan on a commercial truck loan. However, you’ll probably need a significant down payment to offset the depreciation and an excellent credit score.

With a traditional bank, you’ll find it a little more challenging to secure a loan if you don’t have an established history in the trucking industry. However, a solid business plan and down payment may help pave the way to a loan with a traditional bank.

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Commercial and Semi Truck Financing

You may find that there are commercial and semi-truck finance companies that can lend you the funds you need to secure a commercial truck. These companies are in the industry and are used to fund these types of loans, making it easier than seeking funding through a traditional bank.

However, they might only be willing to lease the commercial truck to you. You might also need a down payment for this type of commercial truck loan.

Alternative Lenders

There are alternative lenders available to help you. If you have a lower than average credit score or another reason for not going the traditional route, an alternative lender can help.

Most Common Commercial Truck Loans Requirements

When it comes to securing a commercial truck loan, there are some requirements that you’re going to need to meet. For example, you’re going to need to have a credit score that meets the lender’s criteria, and you might need a down payment of some size.

Some lenders might require a certain length of history in the trucking industry, commercial truck licenses, or proof of insurance. In addition, you might need to provide a business plan or meet other criteria; it depends on the lender.

Bank Requirements

With a traditional bank loan, you can expect to meet the requirement of two years of experience in the trucking industry with $250,000 in annual revenue. You also need a decent credit rating.

If you’re opening a small business, the bank will look at your personal credit score, and if you have an established trucking business, they’ll look at the business’s credit score. You might need to put down a significant down payment as well.

Truck Finance Company Requirements

It depends on the truck financing company, but most will want you to have a business credit score of at least 650. You might find a company to do it with a lower credit score but expect to put a higher down payment for the loan.

The truck finance company might require you to choose your load through their customer base or assign you loads. Another requirement might be a minimum of two years of experience driving commercial trucks.

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Alternative Lender Requirements

With an alternative lender, you can shop for the requirements that you meet. For example, you won’t need as high a credit score, and you might find a lender willing to loan you the funds without an extended period of working in the trucking industry. However, with a bad credit score, you may have to pay higher interest on your loan.

You can fill out a single application to find the lenders willing to work with the requirements you fulfill. This helps you save time and helps you buy the commercial truck.

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