Trucking business loans

Published minimums, checked

Choosing between the three ways carriers fund themselves

1. For a truck or trailer, use equipment finance. The asset secures the facility, the term matches its working life, and the published minimums are the lowest in this record.
2. For the gap between delivery and payment, price freight factoring against a line of credit. Factoring is usually faster to arrange and priced per invoice; a line is cheaper if you can get one.
3. For fuel and maintenance in a bad month, a line of credit or a merchant advance. Both are expensive and the advance is the more expensive of the two, so it is worth knowing in advance which of them you would actually be able to get rather than finding out in the week you need it.
4. Check your authority and insurance are current before you apply for any of them. A lapse in either stops the file at the first look, whatever the numbers on it say, and it is the single most common avoidable reason a carrier's application dies before an underwriter reads it.

Why factoring dominates haulage funding

A carrier delivers a load and waits thirty to sixty days for the broker or shipper to pay, while diesel and drivers are paid weekly. That mismatch is structural, not a sign of a badly run business, and freight factoring exists to close it. The factor advances against the freight bill and collects from the broker, which also means the credit risk it is assessing is the broker's rather than the carrier's. That is why the factoring companies in this record publish no eligibility minimums for the carrier: the carrier's own file is not the thing being underwritten.

The truck is the easiest thing to finance

Truck financing, trailer financing, box truck financing and dump truck financing are separate searches because they are separate secondhand markets, and a lender's appetite follows the market rather than the sector. A three-year-old sleeper cab has a deep resale market; a specialised vacuum or septic body does not, and the facility is priced accordingly. Six lenders in this record keep a live equipment page. Where they publish a bar it is lower than their unsecured bar, and a carrier under a year old who cannot clear an unsecured minimum may still clear an equipment one.

Bad credit and new authority

A new-authority carrier with imperfect credit is the hardest file in this record and it is not an impossible one. The published minimums that matter are the low ones: two lenders here publish a five hundred credit score floor, and the equipment page of a third publishes five hundred against a hundred and fifty thousand dollars of annual revenue. Below that, the honest options are a larger deposit, a personal guarantee, a co-signer, or leasing from a dealer that carries its own paper. What does not work is applying to twelve lenders in a week: each look leaves a mark and the pattern itself becomes a reason to decline.

Common questions

Can a new trucking company get a loan?

For a truck, often yes, because the truck secures it and several lenders publish minimums a new carrier can clear. For unsecured working capital, rarely, because every lender in this record that publishes a minimum time in business asks for at least six months and most ask for a year. Freight factoring is the usual answer in the first year because it underwrites the broker rather than the carrier.

Is freight factoring cheaper than a line of credit?

Almost never per pound advanced. It is usually faster to arrange, available to carriers a line of credit would decline, and priced per invoice rather than per month. The right comparison is not which is cheaper but which you can actually get, and then whether the cheaper one becomes available once you have twelve months of clean history.

What credit score do I need for trucking business loans?

It depends entirely on what the money is for. Against a truck, the lowest published bars in this record are five hundred. For unsecured borrowing the published bars run from five hundred to six hundred and twenty-five, with a median of six hundred, and every one of them is a floor rather than an approval.

By borrowing product

• merchant cash advance: what the lenders who offer it actually require
• equipment financing: what the lenders who offer it actually require
• invoice factoring: what the lenders who offer it actually require