Small Business Loans For Truck Drivers – Whether you work as an independent contractor or own your own trucking company, the cost of becoming a truck driver is reasonable. The good news is, no matter what your situation, there are fast cash loans online for truck drivers. You can use the funds from these loans to cover a variety of fees and expenses, from liabilities to operating expenses. Below you’ll find everything you need to know about trucker loans.
Truck loan funds can be used as working capital for various expenses, especially when you start or operate your own trucking business. Here are some of the different costs associated with running and/or running a trucking business, all of which can be covered with a loan:
Small Business Loans For Truck Drivers
Why turn to credit instead of savings? Well, when most people set up a savings fund, it’s for personal emergencies, and even if that’s not the case, it helps to spend all of your savings on one purpose. This is probably not a good idea, especially if you work as a contractor.
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Now, if you want to start or grow a transportation company, you probably don’t have that much money on hand. Starting with a few trucks or growing a full-fledged business can cost thousands or even hundreds of thousands. This is where loan options can help.
Here are some of the different types of loans that truck drivers and those working in the transportation industry may be able to get:
The Small Business Administration (SBA) works with lenders across the country to offer federally backed business loans. SBA-backed loans are an ideal starting point for borrowers who do not have access to other business loan options. SBA trucking loans are also available to independent contractors, so you don’t need to run a trucking business to qualify.
If you are a truck driver or truck owner, consider the following SBA loans:
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This is the most popular loan program offered by the SBA. You can use SBA 7(a) loans for short- or long-term working capital, refinance existing business debt, purchase equipment, real estate, and more. The maximum loan amount for an SBA 7(a) loan is $5 million. Lenders will look at your income projections, your trucking business or personal credit history, and where your trucking business is located. Veterans Affairs loans have the same terms and conditions as SBA 7(a); however, they offer reduced benefits to veterans and military members.
The 504 loan program provides long-term, fixed-rate financing options for businesses using fixed assets. Eligibility requirements are similar to SBA 7(a) loans, and the maximum loan amount is also $5 million. However, the way you use a 504 loan will be different than an SBA 7(a) loan. As noted above, 504 loans must be used for capital assets that drive business growth and create jobs. As such, they cannot be used for things such as working capital, note factoring, refinancing, debt consolidation, or investment opportunities.
Microfinance is a smaller lending option than the SBA. The maximum loan amount is $50,000 and the average is $13,000. You can use these loans to pay off various expenses of your shipping business, including working capital.
Equipment loans and grants can help you pay for all types of equipment you need for your job or to run your trucking business. Some examples of required equipment include buying or leasing a truck, maintenance and repairs, insurance costs, fuel, taxes, etc. While equipment leases pay the lender to use their equipment. You can even purchase the equipment immediately after the lease expires, with an upfront payment included in the purchase.
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Buying a truck is an important part of the loan industry. In fact, there are commercial truck financing companies and commercial truck loan companies that offer truck leasing and buying options. When buying commercial trucks specifically, a commercial truck loan or credit financing may be a good option.
A business line of credit allows you to borrow against a line of credit. You can borrow from this business line of credit as many times as you want until your line of credit is set. You only pay interest and fees on the amount you borrow. This works well when you have some small business expenses or are not sure exactly how much you want to borrow.
A business credit card is just like any other credit card, except you can only use it for business expenses. Many expenses can be considered business expenses, so you have a lot of flexibility in how you use your loan. To qualify for a business credit card, you need to have an established business credit score. Or, if your business model is a sole proprietorship, you can use your personal credit score. To qualify for a business credit card, you need to have at least a “good” credit score.
When applying for business loans and freight credit cards, the application process can be more intensive than any loan option available to consumers. As you prepare to complete the credit card and business loan transfer application process, make sure you can answer the following questions:
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A business loan works well if you want to start or grow a trucking business. However, when you are self-employed and working for a trucking company, other options may be better. Or let’s say you don’t qualify for a trucking business loan. In this case, a business loan, business line of credit, or business credit card isn’t the right choice for you; consider these loans:
Personal loans are unsecured loan options for short-term emergencies. Whether you own multiple trucking companies or are self-employed, a personal loan can get you the money you need in no time. You can use a personal loan to pay for a variety of expenses such as equipment financing, truck expenses, fuel, and more. Personal loans are also available for borrowers with bad credit. So, even if you have bad credit, don’t hesitate to apply for one of these loans!
Cash advance loans can be anywhere from a few hundred to a few thousand dollars. This can be a good option for small business owners and the self-employed who need extra cash during payouts. You can find cash loans with low credit scores, or by credit card if you have good credit. While these loans are handy when you’re on the road, they may only be good for small purchases and not for running or growing a trucking company. Another thing to consider is that these loans can have high interest rates, short repayment terms, and can have a lot of extra fees.
If you have bad credit, a short-term loan can be a short-term loan option that can help you get the money you need. These loans are usually only a few hundred dollars, which may be better for truckers who don’t want to seek business financing. While these loans can be quick and flexible for people with bad credit, they can come with high fees and extremely high interest rates. In fact, many short-term borrowers are having trouble repaying their loans.
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A title loan is a loan that uses the borrower’s vehicle as collateral. If you own your truck outright, you can use your commercial truck as collateral for a loan. The amount of your loan will depend on the value of the truck, your income and your ability to repay the loan. While an equity home loan is a potential option for dealing with bad credit, it might not be the smartest financial move. Home equity loans have high interest rates and substantial fees.
Whether you start your trucking business as a contractor or looking to take your small business to the next level, you need flexible financing to meet your working capital needs. A trucker loan can provide you with the funds you need to cover all of these costs and more. With the right loan, you can gain the financial resources and confidence you need to start and grow your business or career. By: Lara Vukelich By: Lara Vukelich Arrow Rights Insurance Contributor Lara Vukelich is a freelance writer who has written for Expedia, Travelocity, and MyMove for The Huffington Post and Quiet Revolution. It is located in San Diego, California. Contact Lara Vukelich via email
Robert Thorpe Editor Robert Thorpe Editor Arrow Right Prior to joining, Robert was an editor and writer at The Motley Fool’s The Ascent, covering a variety of personal finance topics including credit cards, mortgages and loans. Connect with Robert Thorpe on LinkedIn LinkedIn Robert Thorpe
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