In a post recession economy financing a commercial truck is more difficult than it used to be. Here are five alternatives to help you with your next truck purchase. Using Trucks for Commercial Applications Many businesses have needs that require the used of specially designed and equipped commercial trucks. A wide variety of trucks are manufactured to meet various needs and applications. At the high end of size and weight for road vehicles are semitrailers. Other trucks are as small as half ton vehicles. A common need for all trucks is that they have to be financed. In the rare case a commercial truck is bought with cash, it is a larger corporation doing the purchasing. A variety of methods of commercial truck financing are available. The best alternative for a particular situation is first determined by by whether or not the financing is for an individual or a business.
The creditworthiness of the purchaser is the next key factor to consider. Primary options for commercial truck financing include the following options:
Option 1 Traditional bank financing. Banks provide commercial loans for a variety of needs. The ability to acquire bank financing will generally be easiest if there is a pre-existing relationship with the bank. if the purchaser is a business with existing credit facilities at the bank, this might prove to be an excellent alternative. Without a relationship, loans are generally limited to newly purchased vehicles.
Option 2 Commercial vehicle lenders. There are companies that specialize in lending for commercial vehicles. These companies usually have extensive relationships with dealers and manufacturers. They will sometimes provide multiple fleet loans for companies. They also take care of dealing with used commercial trucks and trade-ins. These lenders are able to control their risks in the marketplace by dealing in a large volume of commercial vehicles. They are more likely to lend on used vehicles.
Option 3 Dealer Financing. To help with sales, many commercial dealers have established relationships with third party lenders. Some truck manufacturers have also established finance companies. These sources are often good alternatives if the purchaser qualifies under their credit standards.
Option 4 Seller financing depending on the circumstances, a seller will oftentimes consider carrying a note. One downside for this form of financing is that it is usually for a shorter period of time and requires a larger down payment.
Option 5 Leasing. An excellent alternative in many cases is to use commercial leasing. Leases can have tax advantages for a business. Down payments and monthly payments are usually lower than traditional financing alternatives. Initial commercial truck financing is usually a hurdle.
Once a relationship is established, many commercial lenders build their business on repeat customers and multiple commercial truck financing with the same customers.
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