Being a truck driver comes with its fair share of expenses, regardless of whether you work as an independent contractor or have your own trucking business. The good news is that no matter what scenario you fall into, there are online fast cash loans for truck drivers available. You can use the money from these loans to cover all sorts of costs and expenses, everything from liabilities to operating expenses. Below you will find everything you need to know about loans for truck drivers.
What Can I Use a Truck Loan for?
The funding from a truck loan can be the working capital for various expenses, especially if you are starting or running your own trucking business. Here are some of the different costs associated with working within and/or running a trucking business, all of which a loan option could cover:
- Fuel costs
- CDL fees
- Truck purchase or rental
- Toll costs
- Paying off existing debt
- Equipment financing or purchases
- Everyday maintenance and expenses
- Truck Insurance
- Permits and licenses
- Administration costs
- Broker fees
Trucking Business Loans and Financing Options
Why turn to a loan rather than savings? Well, when most people build a savings fund it was meant for personal emergencies, and even if it wasn’t, it may not be the best idea to spend all your savings on one purpose, especially when working as a contractor.
Now, if you are looking to start or grow a trucking company, you probably don’t have that money at hand. It can cost thousands and even hundreds of thousands to get started with a few trucks or grow an established business. And that is where a loan option can help.
Below are some of the different types of loans that may be available to trucking businesses and those working in the trucking industry:
Small Business Loans for Truckers
The Small Business Administration (The SBA) works with lenders all across the country to provide federally backed business loans. SBA-backed loans are the perfect place to start for borrowers who don’t have access to other business loan options. SBA trucking loans may also be available to independent contractors, so you don’t need to run a trucking business to qualify.
Here are some SBA loans to consider if you are a truck driver or a trucking business owner:
SBA 7(a) Loans and Veteran Advantage Loans for a Trucking Business
This is the most common loan program that the SBA offers. You can use an SBA 7(a) loan for short-term or long-term working capital, refinance current business debt, purchase equipment, real estate, and more. The maximum loan amount for an SBA 7(a) loan is 5 million dollars. Lenders will look at income projections, your trucking business or personal credit history, and where your trucking business operates. Veteran advantage loans have the same terms as SBA 7(a) loans; however, offer reduced fees for veterans and service members.
SBA 504 Loans for Your Trucking Business
The 504-loan program offers long-term fixed-rate financing options for businesses to use on fixed assets. Eligibility requirements are similar to SBA 7(a) loans, and the maximum loan amount is also 5 million dollars. However, the way you can use a 504 loan will differ from an SBA 7(a) loan. As mentioned above, a 504 loan must be used for fixed assets that promote business growth and job creation. And so, they cannot be used for things like working capital, invoice factoring, refinancing, consolidating debt, or an Investment opportunity.
A Microloan is a smaller loan option from the SBA. Maximum loan amounts are $50,000, and average loan amounts are $13,000. You can use these loans to pay for all kinds of expenses for your trucking business, including working capital.
Equipment Financing and Leasing for Your Trucking Business
Equipment financing and loans can help you pay for all kinds of equipment you will need when working for or running a trucking business. A few examples of necessary equipment include a truck purchase or lease, maintenance and repair, insurance expenses, fuel, taxes, and more. While equipment leasing is paying a lender to use their equipment. Once the lease is over, you may even be able to buy the equipment outright, with your previous payments counting towards the purchase.
Commercial Truck Loans and Trucking Financing Options
Buying a truck is a large part of the lending industry. In fact, there are Commercial truck financing companies and commercial truck loan companies that offer rental and purchase options for trucks. A commercial truck loan or loan financing can be a great choice when specifically buying a commercial truck.
A Business Line of Credit for Your Trucking Company
A business line of credit lets you borrow from a line of credit. You can borrow from this business line of credit as many times as you need until the credit limit is set. You will only pay interest and fees on funds that you borrow. These work well when you have multiple more minor business expenses or are unsure about exactly how much you want to borrow.
Business Credit Cards
Business credit cards work similarly to other credit cards, except you can only use them for business expenses. Many expenses can qualify as business-related, and so, you will have a ton of flexibility with spending your credit. To be eligible for a business credit card, you will need to have established a business credit score. Or you can use your personal credit score if your business model is a sole proprietorship. To be eligible for a business credit card, you will have to have at the very least a minimum credit score that falls within the “good” category.
The Application Process With Trucking Business Loans
When applying for trucking business loans and credit cards, the application process can be a little more in-depth than loan options that any consumer can apply for. When getting ready to get through the application process for trucking business loans and credit cards, make sure that you can answer a few questions like:
- What is your business plan?
- Your credit history
- The loan amount you are asking for from business loans or line of credit you are asking for.
- Whether you want to use collateral (can also be a down payment or asset).
- Financial projections
- Consider a personal guarantee if your credit score isn’t great.
- Get ready to talk about your industry experience.
Loans from Traditional Lenders
Business loans may work well if you want to start or grow a trucking company. However, other options may work better when you are self-employed and working for a trucking company. Or suppose you don’t qualify for trucking business loans. In that case, a business loan, business line of credit, or business credit cards, aren’t the right option for you; instead, consider these loans:
Personal Loans for Truck Drivers
Personal loans are unsecured loan options that work well for a short-term emergency. Whether you have multiple trucking companies or work for yourself, a personal loan could help you get the money you need fairly quickly. You can use personal loans for all kinds of expenses like equipment financing, truck costs, fuel, and more. Personal loans are available for bad credit score borrowers as well. And so, even with bad credit, do not hesitate to apply for one of these loans!
Cash Advance Loan Options for Your Trucking Company
A cash advance loan makes a few hundred dollars up to a few thousand dollars available. It can be a good option for small business owners and self-employed individuals who need extra cash between pay periods. You may be able to find a cash advance loan with a low credit score or through a credit card if you have good credit. Although these loans can be convenient while on the road, they will likely only work for small purchases rather than running or growing a trucking company. Another thing to consider is that these loans can come with high-interest rates, a short period to repay, and can mean tons of extra fees.
Payday Loan Options for Bad Credit
If you have a bad credit score, a payday loan can be a short-term loan option that can help you get the funds you need. These loans are usually only for a few hundred dollars, which may work better for truckers who aren’t trying to find business financing. Although these loans can be fast and flexible for those with a bad credit score, they can come with high fees and extremely high-interest rates. In fact, many people who take out payday loans have trouble making their loan payments.
Title Loans for Truckers with Poor Credit Scores
Title loans are loans that use the borrower’s vehicle as collateral. If you own your truck outright, you can use your commercial truck as collateral for a loan. Your loan amount will be based on the value of your truck, income, and ability to pay the loan. Although a title loan is a potential option for bad credit, it may not be the smartest financial move. Title loans come with high-interest rates and tons of fees.
Get Started With The Trucking Loan You Need Today!
Whether you are trucking as a contractor or looking to take your small business to the next level, you will need flexible financing for your working capital needs. A loan for truckers can provide the funding you need to cover all of these expenses and more. With the right loan, you can have the funding and the confidence you need to start and grow your business or career.