How to Get a Commercial Truck Loan

Written by Banks Editorial Team
4 min. read
Written by Banks Editorial Team
4 min. read

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Trucking companies need sufficient trucks in their fleets to address customer shipments. Expanding operations helps these businesses serve new clients and gain market share. Adding trucks to your fleet can get costly, but a commercial truck loan makes it more manageable. You won’t have to pay the full price, and you can spread the payment over several years. Lenders like Mulligan Funding support trucking companies with the right type of financing so they can grow their fleets. We’ll discuss the loan process and help you save on your commercial truck financing.

Flexible and Fast Small Business Loan Quote

How Do Commercial Truck Loans Work?

Not every business owner can buy a truck outright. Some fleet managers have enough resources, but they can spread the capital across several loans to get more trucks with the same money. Most lenders will ask for a down payment and provide enough financing to cover the difference. Lenders use your truck as collateral, meaning they can take the truck if you fall behind on loan payments. Lenders will make the best possible effort to avoid this scenario and work with you to ensure payment. 

Lenders will charge interest for letting you use their money. The interest rate provides lenders with a profit for incurring the risk of handing out their money. You can select a short loan term to pay less interest but make higher loan payments each month. A longer loan term decreases your monthly payments but results in more interest in the long term.

Should You Get a Lease or Loan for Your Commercial Truck?

Leases and loans work for different scenarios, but the primary consideration is how long you’ll need the truck. Some trucking companies see an uptick during the holiday season that then fades and returns to normal. Under these circumstances, it makes more sense to lease new trucks for a short-term financial obligation. You don’t want to pay extra money for trucks to sit in your fleet unused.

A loan makes more sense if you plan to use the same truck for several years. You can eventually remove loan payments from your budget by paying off the principal. However, you will never get out of lease payments. Lessors can raise their prices each year, and you can’t do much about it. You can get a fixed-rate loan that won’t cost more money each year. A lease makes sense for short-term needs, while loans make more sense for long-term vehicles.

Getting Commercial Truck Loans from Traditional Banks vs. Alternative Lending Partners

Traditional banks and alternative lenders can provide semi-truck financing, but they each have pros and cons. Traditional banks can help you get better loan terms, but they have more stringent requirements around credit scores, financials, and other essentials. Traditional banks can also take a while to provide you with a loan. As a result, another truck company may buy the truck you’re looking at by the time you get financing.

Some alternative lending partners charge substantially higher interest rates than traditional banks, but Mulligan Funding doesn’t fall into this category. They offer competitive rates and won’t hurt your credit score with a hard credit inquiry. Traditional banks use these hard inquiries to learn more about you. Mulligan Funding’s soft pull will not impact your score. You can also get access to financing even if you have bad credit. Some truck companies turn to alternative lenders after not getting approved by a conventional financial institution.

Alternative lending partners can provide you with the money quickly. Mulligan Funding has next-day funding available for qualifying applicants. (1) This quick turnaround lets you approach the truck’s owner while competitors scramble to get traditional financing. (1)

Flexible and Fast Small Business Loan Quote

Financing Your Commercial Truck Loans

Loans help you finance a commercial truck loan, but you don’t want to turn a great financial product into a burden. We’ll discuss some factors to consider when getting a commercial truck loan so you can get approved and comfortably make loan payments.

Determine The Type of Truck You Need

  • Type Of Truck: Some trucks cost more than others. You’ll have to get more financing for a Freightliner than a Ford L9000. You might already have a commercial truck in mind, but if not, review several options before applying for a loan. You don’t want to end up with insufficient financing because the truck you want is high-end.
  • New vs. Used: New trucks can get you more mileage, but they also cost more. Some truck fleets can settle with used trucks and save money with these vehicles. Interest rates are higher for used vehicles, but you’ll pay less for the truck.
  • Age and Mileage: The age and mileage of any truck impact its value. You’ll have to pay more attention to these metrics for used vehicles. Some truck owners took great care of their commercial trucks, while other trucks don’t have much time. Compare rates across used trucks to understand how much you should offer for a truck based on its age and mileage. 

Review Your Credit Score

Lenders will look at your credit score to see if you qualify for a loan. Even if you fulfill the minimum requirements, a credit score remains pivotal for loan repayment. A higher credit score helps you access higher loan amounts and lower interest rates. Lenders see high credit borrowers as low risk, and they’ll incentivize you with lower rates. 

Prepare Paperwork and Other Requirements

Lenders will ask for paperwork and documents during the application process. You should check each lender’s requirements. While most of them follow the same rubric, some lenders may ask for additional documents. You should assemble paperwork and documentation for the following:

  • Tax Returns and Bank Statements: Some lenders may want to see one year of tax returns and bank statements, while others may want 2-3 years of information.
  • Business and Personal Financial Documents: These documents have similar requirements as tax returns and bank statements.
  • Commercial Driver’s License: Lenders want to make sure you or a co-worker can legally operate the vehicle before giving you money.
  • Truck Insurance: You must have insurance to register a truck.
  • Down Payment/Collateral: Some lenders require a minimum down payment. Make sure you have enough funds for a down payment before applying for a business loan. You will likely have to provide the truck as collateral. Loans with collateral have lower interest rates than unsecured loans.

Choose Your Lender

Truck companies can choose from many lenders. When borrowing through lending partners, you should consider Mulligan Funding. Mulligan Funding provides access to loans for small business owners ranging from $5,000 to $2 million. You can get funding the next day even if you don’t have the best credit score. (1) You can navigate to their website to request a free quote for your financing needs.

Compare Available Loan Rates and Terms

You want the best deal for your loan. It’s never good to rely on a single lender. Instead, you should shop around and see which rates and terms work best for your budget and preferences. 

Submit Your Application

Narrow your list and submit applications to your favorite lenders. Assembling the paperwork and documents once makes it easier to submit multiple applications. While more applications lead to more choices, you don’t want to trigger too many hard credit inquiries. Submitting your application to Mulligan Funding and other lending partners that conduct soft credit pulls will not hurt your score. Once you submit your application, wait for the offers to come in and choose the right one for you. (*)

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Approval and funding speed refer to applications submitted during normal business hours (Monday-Friday, 9 AM – 5 PM PT.) Most approvals happen within a few hours on completed submissions. Delays could occur due to unforeseen circumstances or if additional information or verification is required.


Approval and funding speed refer to applications submitted during normal business hours (Monday-Friday, 9 AM – 5 PM PT.) Most approvals happen within a few hours on completed submissions. Delays could occur due to unforeseen circumstances or if additional information or verification is required.


Approval and funding speed refer to applications submitted during normal business hours (Monday-Friday, 9 AM – 5 PM PT.) Most approvals happen within a few hours on completed submissions. Delays could occur due to unforeseen circumstances or if additional information or verification is required.


Final loan decision may be subject to underwriting by FinWise Bank.