Sometimes, one reliable van or service car is the difference between staying ahead and scrambling to catch up.

If your work depends on deliveries, site visits, or hauling equipment, the vehicle you use is a part of the job.

Using a personal car might get you by for a while, but overtime it chips away at your time, your margins, and how your small business shows up. 

At a certain point, it makes more sense to get a small business vehicle loan.  

Let’s talk about it. 

What’s the Best Way to Finance a Business Vehicle?

Here’s the clearer version of what you’re actually looking at:

Traditional Bank Loans

These are usually the first things people think of.

Solid interest rates. 

Long-term.

A very structured approach. But here’s the reality:

• You’ll need strong personal and business credit
  
• Banks often ask for two or more years in business
  
• The application process can take weeks, not days
  
• You may need to front a significant down payment

This can work well if your books are spotless and your timeline is flexible.

But for many smaller or newer businesses, it’s just not built to move fast, or to say yes.

Equipment Financing

Most vehicles qualify under this category, and it’s often easier to access than a traditional loan.

• The vehicle serves as collateral, which lowers the lender’s risk
  
• You can often get approved with limited credit history
  
• Turnaround times are usually faster, and paperwork is lighter

This is a strong option if you know what vehicle you want and just need a lender who won’t make you jump through 30 hoops to get it.

Alternative Lenders 

These are lenders that don’t expect perfection. 

Some of them specialize in working with small service businesses, contractors, and solopreneurs. 

They focus on how your business actually runs by checking your revenue flow, daily operations, and forward momentum, not just your balance sheet.

Plus, they usually offer flexible repayment structures, shorter terms, and quick approvals.

SBA Loans

Through the SBA 7(a) or 504 programs, you may be able to finance a vehicle as part of a broader business plan.

• These loans are backed by the government, which reduces risk for lenders
  
• Terms can stretch longer, and interest rates are competitive
  
• But approval takes time and requires a lot of documentation

This isn’t a fast solution, but for well-prepared businesses looking for stability, it can be a solid path.

Business Line of Credit

If you already have access to a business line of credit, you might not need to apply for a vehicle-specific loan.

• You draw only what you need
  
• Can be useful for used vehicles or vehicles under 15K
  
• No separate application needed if it’s already in place

It’s best used when you have flexibility in cash flow and don’t want to lock into a structured loan right away.

What Lenders Look At

Even when lenders say they’re flexible, they still need a way to evaluate risk. 

Here’s what most of them pay attention to:

Business Credit and/or Personal Credit

Some lenders will weigh both. 

If you’re newer, personal credit might carry more weight. 

If you’ve been in business for a while and have trade lines open, your business credit score can help improve your terms.

Revenue Health

They’ll want to see consistent income. 

Daily, weekly, or monthly, it doesn’t matter as much as whether money is actually coming in reliably.

For example, if you made 20K in one month but nothing in the other five, that’s going to raise questions. 

But if you pull in 5K every month steadily, that’s more attractive, even if the total is lower.

Time in Business

Traditional lenders love two years or more. 

But alternative lenders might go as low as six months or even three, depending on your revenue and other factors.

The Vehicle Itself

What are you buying?

Some lenders only finance new vehicles. 

Others will fund used vehicles, but they might cap the age or mileage.

If you’re buying a specialty vehicle, like a refrigerated truck or a flatbed, it may qualify under equipment financing, which gives you more options.

Down Payment and Collateral

A lot of lenders want to see that you’re invested too. 

If you can put down around 10 to 20 percent, you’re more likely to get approved, and probably at a better rate. In some cases, if the vehicle doesn’t fully cover the loan, they might ask for something else as backup.

It’s their way of making sure you’re not walking away with all the upside and none of the risk.

What to Do Before You Apply

Before you apply, take a minute to clean up your paperwork.

Have your bank statements ready, know how much you can put down, and make sure you’ve picked out the kind of vehicle that makes the most sense for your business. 

If you’re not sure what loan type fits best, note that too. 

A good lender will help you figure that out. And if your credit or cash flow isn’t perfect, don’t stress. 

What matters most is knowing where you stand so the person reviewing your application can see the full picture.

Grow Your Business with ROK Financial 

Your vehicle is the heartbeat of your business. 

It carries goods, tools, late-night coffees, and the reputation you earned by word of mouth. 

When it stalls at the side of the road, your schedule collapses, and clients wonder if they picked the right crew.

At ROK Financial, our business vehicle financing is built for businesses like yours. 

We look at your steady deposits, busy seasons, invoices in progress, and offer funding that moves at your pace. 

Whether you need to own the truck outright, keep cash free for payroll, or leave room to upgrade later, we’ll help you map out what works.

Fast approvals and flexible terms, even if your credit isn’t perfect.

If your current ride is slowing you down, let’s talk about a better one. 

The post How to Finance a Business Vehicle as a Small Business Owner appeared first on ROK Financial.

The trucking business is booming, and that growth has attracted the attention of funders. Although the bigger lenders may avoid companies who don’t command reliable profit margins, it doesn’t mean that getting a business loan for a new truck is hard. All that’s left to decide is what you need and how to do it.

In this article, we’ll discuss the ins and outs involved in securing funds for a new truck. There are several options available, all with their requirements-so let’s get into the details!

What’s Required For Approval For Business Funding For a Truck?

First off, it’s important to know that several types of business loans are available for truck drivers. Each requires different time commitments, repayment plans, and so forth. The types of loan are:

• Short-term loans
• Lines of Credit
• Business Credit Cards
• Equipment Financing
• SBA Loans

Short-term loans are very expensive forms of credit. It’s not a good idea to apply for a commercial business loan for a trucking company unless you have an emergency. On the other hand, most trucking businesses with lower than average FICO scores can secure them in as little as 24 hours for truck business funding.

Lines of credit are similar to credit cards. The lender sets the limit and the borrower pays interest on the amount which they withdraw. LOC (lines of credit) can be used to cover any expense, like short-term loans.

We recommend equipment financing as the best loans for transportation businesses. These loans for truck drivers are made specifically for these kinds of purchases. You can either take out an equipment loan or lease equipment, and you’ll often get low-interest rates and long-term refinancing options.

For the best bank for trucking companies like Wells Fargo and Commercial Fleet Financing, you’ll need a credit score north of 640+ and provide proof of three-year experience. Others have no minimum FICO. Usually, you’ll need to give proof of monthly sales gross of $15,000 or more.

SBA (Small Business Administration) loans are government-backed, and they’re most commonly used by businesses that don’t qualify for traditional business loans. They’re generally more flexible with repayments than other loans. We’ll talk more about them below. However you may have issues obtaining an SBA Loan within the trucking industry.

With all these loans, you’ll need to submit a credit score. SBA loans aren’t great for trucking business loans with bad credit, but it’s still a good idea to apply anyway. Equipment financing is not as hard to find if your score isn’t ideal.

With equipment financing (which we recommend for buying a new truck), there are a few requirements to keep in mind. If your company brings in over $120,000 per year, lenders may waive any credit score minimums.

Ensure you get the lowest rate with equipment financing, give proof of adequate insurance, eliminate excess budgetary expenses, and apply for the loan when revenue is rising. You’ll may need to cover 5% or more of the cost for a down payment.

The Steps To Get Funding For Your New Truck

With the lending options out of the way, the next thing to do is start applying. Here are the steps to secure truck business funding.

1. Make sure you’re eligible. Check your credit score (it should be above 600), CDL license (3-5 years minimum), the age of the truck you want to loan if it’s not new (less than 10 years), and the mileage (under 700k)
2. Get your documents together. Every financing company is different, but you’ll likely need the minimum: proof of registered business, tax statements, returns, profit and losses, your CDL, business licenses, USDOT number, motor carrier number.
3. Select a truck. Note the make, model, year, serial no. Take 3+ pictures.
4. Put insurance together. You can get preapproval without insurance, but you’ll need proof before the lender releases the loan.
5. Submit the documents to the lender.

The Benefits of Alternative Financing? Speed!

Without a doubt, the best part of applying for alternative financing for your new truck is the speed with which you’ll get funding. Many lenders (especially for equipment financing) can get you your funds in two to five days. The best lending companies operate online where they can receive your application with no minimum FICO and send you a response in a day.

By applying online, alternative financing gives you more control over which lenders you’re willing to apply with. It’s a zero-pressure way to collect your documents on your own time and submit them when you’ve found your ideal lender.

Is SBA Funding Available For Trucking Companies?

Yes, there certainly is! SBA financing is low-interest 2-5 year loans (though some are 30 years). Generally speaking, it takes around 45 days for an SBA loan to process, but they carry higher maximum amounts and simple applications. There are also small business grants for trucking.

In addition to the conventional SBA loans handed out by the government, you may apply for an SBA disaster loan for a trucking company. These are set aside to cover operating expenses caused by natural disasters such as COVID-19. Economic injury disaster loans (EIDLs) can help recoup losses brought about by the pandemic.

Conclusion

You have a lot of options when seeking out suitable commercial business loans for a trucking company. There are a lot of potential options to find funding for the trucking business. Short-term loans and lines of credit are fast ways to get capital, but equipment financing and SBA loans are often the safer long-term choice.

Either way, it’s easier now to secure quick funding for trucking companies than it’s ever been.

The post What Are The Requirements To Get Business Funding For a New Truck? appeared first on ROK Financial.

Below we will discuss the best loans for transportation businesses and alternative financing options available to trucking companies. Whether you are struggling this year or are just getting started as a company and need funding, there are different costs and requirements to consider when deciding on your funding options. We will go over the most popular types of financing for trucking companies in 2021 and what they entail.

Funding Your Fleet in 2021

As a trucking company, you have many different loan and financing options to choose from in 2021. Here are some of the most popular types of commercial business loans for trucking companies and what they require.

Bank Loans for Trucking Companies

Bank loans for trucking companies often come with the best rates out of all commercial loans because they are competitive. They provide loans with different term lengths, lines of credit, asset-backed loans, and more. Research to find the lowest rates and the best bank for trucking companies.

Borrowing from a bank often has tighter requirements than other lenders and makes it harder for you to get a loan. These include good personal credit, good business credit, steady cash flow, business collateral, steady income, and more.

• Rates are typically between 5% and 15%
• Funding varies from $50,000 to $5,000,000
• Collateral is required to obtain a loan
• The terms vary, ranging between 1 and 30 years
• The fees are considered medium costs

Lines of Credit for Trucking Companies

If you are looking for funding for a trucking business, you can take a line of credit from a bank to pay for your expenses. They allow you to access funds when you need them without taking out a new loan each time. You can take out a secured or unsecured line of credit with a trucking business.

Secured lines of credit are backed with collateral from your company, such as machinery, real estate, or accounts receivable. An unsecured line of credit comes as a credit card and requires you have good credit.

Small Business Grants for Truck Drivers

If you are looking to obtain trucking business loans, bad credit can often get you into trouble. An alternative option to loans is grants. Grants are significant for small business starters because they are money you do not have to pay back. There are a variety of grants that truck drivers wanting to start their own business can obtain.

The US Federal Government has a variety of different small business grants for trucking available. You can research Grants.gov to see and apply for open grants. The SBA also has a grant search feature on its website. To obtain a grant, you have to apply and get accepted, and it may or may not matter how your personal or business credit is.

SBA Loans for Trucking Companies

An SBA loan for trucking companies is provided to small businesses and backed by the US Small Business Administration. They provide financial help to businesses that have not secured traditional financing from a bank. These are some of the best loans for truck drivers.

An SBA loan allows trucking businesses to get financing when they can’t get it from a bank. These loans aim to encourage typical bank lending by agreeing with the bank to pay back most of the loss if the borrower is unable to pay back the loan. You must meet specific requirements before acquiring an SBA loan and certain things you can do to prepare for an SBA loan.

• Rates are typically between 5% and 8%
• Funding varies from $50,000 to $500,000
• Collateral may be required to obtain a loan
• The terms vary, ranging between three and 25 years
• The fees are considered medium costs

How Truck Drivers Are Taking Advantage of Alternative Financing

There are several different financing options for trucking companies. These include bank loans, SBA loans, lines of credit, equipment financing, asset-based loans, and more. There are alternative funding options for trucking companies that don’t meet traditional bank and SBA loan guidelines.

Truck drivers can take out what is called a mid-prime alternative loan. They will not have as low of rates as the other loan options, but they are often lower than many of the online business loan options. They provide long-term loans and are often able to get you your funds much faster than typical banks.

Another option for alternative financing is Equipment financing for trucks. With these, you finance your equipment and repay the interest over a fixed amount of time. The equipment is the collateral for the loan, and when you have paid it off, the equipment is yours.

If you have bad credit, lack business documentation, or need financing immediately, you can also consider taking out a trucking cash advance. These are not loans, but rather it is a business-to-business selling of the revenue your trucking company will be making in the future. You essentially sell your future income and access the capital you typically would have to wait to receive.

Final Thoughts

If you are struggling to keep your trucking business funded or plan to start your own transportation business, there are many funding options available to you. You will want to get the loan or credit with the lowest rates and most extended terms to save you the most money in the long run.

If you’re looking to learn more about business loans for trucking, complete a 1-minute application to speak with one of ROK Financial’s Business Financing Advisors today.

The post Is a Business Loan the Answer for Trucking Companies in 2021? appeared first on ROK Financial.

You do, unfortunately. You may not have the capital on-hand to invest in a long-haul truck or two. With commercial truck loans or even a small business loan, you may find yourself on the road sooner rather than later.

Buying a new truck is not your only option. Let’s say you want to upgrade your vehicle or repair an existing long-haul truck for your company; the best commercial truck loans can help you upgrade, while commercial truck repair loans assist with the former.

How Funding Can Help?

Securing funding for commercial or semi-truck financing is vastly different from a personal vehicle loan. For starters, the standard interest rate for commercial used truck loans can range from 5% to 30%, unlike the sub 5% rates for personal auto loans.

Most commercial truck drivers, while business savvy, may not have the funds readily available to outright purchase a truck, upgrade their existing vehicle, or pay for extensive repairs. In these cases, financing is the only route. It’s not a bad option, either.

With a commercial truck loans calculator, you’ll quickly discover how much you’re eligible to borrow, your monthly payments, and commercial truck loans interest rates to get you started.

What Are My Best Options?

When it comes to commercial truck loans, a bank may not be your best option. Whether you require a bad credit commercial truck loan or a commercial truck equity loan, chances are you’re better off with a private lender over a credit union or hometown bank.

Commercial truck financing is available for:

• Buying a new or used commercial truck
• Leasing a new or used commercial truck
• Repairing or upgrading a commercial truck

Equipment Financing

With equipment financing options, the commercial truck you purchase acts as collateral against the loan. Say, for example, you miss a payment. The lending company would seize the truck.

This has both positives and negatives. You do not have to put up any other assets as collateral besides the truck, which is good. If the truck is your only source of income, this may not be so good for your business. If anything were to happen that would prevent you from driving, you may not be able to make payments on time and the lender may  seize your truck.

Business Line of Credit

Technically speaking, as a commercial truck driver, you are a small business-at least, to start. As such, you likely qualify for a business line of credit. A small business line of credit is an unsecured loan solely for businesses without a lump-sum disbursement, in which the loan itself acts like a credit card.

You pay for supplies, equipment, gas, etc. Then you repay the amount spent over time, gradually paying down the balance.

Small Business Loans

If you can prove to the bank or a lending company that your business is a sound investment, with a business plan, resources, and experience, then chances are you will be approved for a small business loan. Although, alternative financing companies do not typically require a business plan to be approved.

The thing about a small business loan is the amount you can borrow varies. In some cases, you may not receive enough to purchase a new truck or jumpstart your trucking company. You may need to pursue other options alongside a small business loan.

How Can I Qualify?

It’s important to note that not all lending companies are equal, some enact lending requirements that significantly vary from their competitors.

The general qualifications for commercial truck loans include:

• Information on the commercial truck you have in mind
• A reputable vendor
• Good credit score
• Time in business
• Zero negative marks on your credit report
• A downpayment
• Trucker’s insurance

You will find that many lending companies flat out refuse to finance a used commercial truck. If your goal is to buy second hand – saving some money in the process – spend a little more time researching lending companies that specifically cover used vehicles.

With these above qualifications in place, most of which are easy enough to achieve, you’ll soon have a commercial truck to start your long-haul or delivery business with little hassle. Even if you don’t have stellar credit, securing a commercial truck loan is possible!

Kickstart your commercial trucking career, and apply now for a commercial truck loan! You’ll get matched with a Business Financing Advisor at ROK to help you find the best option.

The post What are the Best Business Loans for Commercial Trucking? appeared first on ROK Financial.

What is Asset Based Lending?

Many banks and alternative lenders offer asset-based lending. An asset-based lender advances funds based on a predetermined percentage of a secured asset’s value. What is the ratio on an asset-based loan? Usually, this will be 70 to 80% of eligible receivables or 50% of any finished inventory.

There are many reasons why a business pursues asset-based loans. This can be an excellent capital source if your company is growing rapidly, highly leveraged, going through a turnaround, or generally undercapitalized. If you need a quick cash infusion to get over a small hurdle in operations, this type of loan can help.

Distributors, manufacturers, and service companies with leveraged balance sheets often use these types of loans. Those impacted by seasonal demand or cyclical industry trends that impede regular cash flow may also seek out this type of loan.

Beware that asset-based loans do tend to cost more than traditional loans. The interest rates vary widely, and lenders may conduct added due diligence and audits – and ask you to pay the fees. Larger banks may also request a personal guarantee.

Leveraging Your Assets

There is more than one type of asset-based loan and how it works varies depending on the precise contract. The majority of lenders prefer to take accounts receivable assets as the primary form of collateral in asset-based lending. If this isn’t an option for you, you can still use other assets, including inventory, real estate, machinery, or other business equipment.

Options for Small Businesses

Asset-based lending is just one type of business loan a small business can pursue. Small businesses will generally put their accounts receivable and inventory on the line to secure such a loan and get immediate access to liquid funds.

If you have a small business, it’s wise to weigh your options when it comes to different program types. Determine whether an asset-based loan is the right fit for your business. The Business Financing Advisors at ROK Financial can help you determine if an asset-based loan is best for your business. Complete a 1-minute application to discuss your options further.

Qualifications

What is an asset-based loan? That part is clear. However, you’re probably now wondering how to get an asset-based loan. Ideally, you will meet the following criteria:

●  Present a positive financial history (in the form of good financial statements and reporting)

●  Possess commonly sold inventory, or large value assets.

●  Have customers who have a proven track record of paying their bills

You should also have a comprehensive financial reporting system in place because you will need to present a potential lender with accurate and detailed financial history information.

The Final Word: What Is Asset Based Lending?

This article answers the question, “What is an asset-based loan?” There are many reasons why a business pursues asset-based loans. Whether an asset-based loan is right for you depends on your precise business needs. Speak with an advisor today at ROK Financial to learn more and get options in minutes, and funding in as fast as just a few hours!

The post Asset-Based Loan: How to Leverage your Assets to Boost Your Growth appeared first on ROK Financial.