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How to Get Trailer Financing

Starting a career as an independent trucker can be a rewarding pursuit. However, it's also a career that requires you to purchase your own tractor-trailer - a big hurdle to overcome for many would-be truckers, given that even low-end tractor-trailers can cost upwards of $100,000 when purchased brand-new.

If you are like most people and don't have an extra hundred grand in cash, pursuing a loan from a reputable trailer financing company is one great option to get you on the road. In this article, we'll cover everything you need about trailer financing, including what it is and how it works, important considerations to keep in mind, and how to qualify for trailer financing.

What is Trailer Financing?

Trailer financing isn't difficult to understand, and you can think of it as a cross between an auto loan and a business loan. To acquire trailer financing, you must work with a trailer financing company. The company you select will consider factors such as your credit score and potential considerations such as your business history and the quality of the tractor-trailer you plan to purchase. If you meet the right criteria, you'll be given a loan to finance your tractor-trailer and start working as an independent trucker.

What Could Prevent You From Getting Trailer Truck Financing?

There are numerous factors that trailer financing companies consider when evaluating applications, and thus there are numerous factors that could potentially prevent you from acquiring trailer financing. This includes factors such as:

A Lack of Business History

Most trailer financing companies want to see at least two years of experience operating within the trucking industry before they provide a tractor-trailer loan. In place of this experience, trailer financing companies may also be willing to consider past experience running a business outside of the transportation industry and/or a larger down payment. It's also worth noting that some trailer financing programs do not require applicants to showcase past business history.

A Poor Quality Tractor-Trailer

Even though newer tractor-trailers cost more, trailer financing companies will almost always be more willing to finance a new or near-new tractor-trailer than they are, one that already has a lot of miles on it. The reason for this is simple: your ability to pay back a tractor-trailer loan will largely depend on your trucking company's success. If you purchase a truck that breaks down two months into its use, you may need help to make your loan payments. Finishing poor-quality tractor-trailers present a bigger risk to trailer financing companies.

Not Having Great Credit

Credit score requirements for trailer financing will vary from one trailer financing company to another. If your credit score is at least 600, you may need help to secure a tractor-trailer loan. Having less-than-ideal credit may also mean paying higher interest rates even if approved for the loan.

Being Low on Cash

Generally speaking, most trailer financing companies want to see a certain amount of cash available in your accounts before offering you a loan. Having enough cash to cover a few months' payments demonstrates that you can make your loan payments even if your trucking company experiences a few lean months. While some trailer financing programs don't have this requirement, being too low on cash will bar you from consideration in many cases.

Past Financial Mistakes

Past financial mistakes such as late payments, bankruptcies, and foreclosures can prevent you from qualifying for trailer financing. Some lenders are more lenient than others regarding these mistakes, and you may be able to make up for them by providing a larger down payment.

Not Having a CDL

In most cases, acquiring your CDL will be a prerequisite for acquiring a tractor-trailer loan. However, some trailer financing companies are willing to provide financing to applicants who still need to acquire their CDL, enabling you to ensure that you can secure funding for your business before you go through the trouble of getting your CDL.

How to Qualify for Trailer Truck Financing

To qualify for trailer financing, here are the qualifications that you will likely need to meet:

  • Down Payment: A down payment equivalent to at least one monthly payment is usually required.
  • Credit Score: Most trailer financing companies will require a minimum credit score for consideration, but some programs require no minimum credit score.
  • Business History: Most trailer financing companies want at least two years of experience operating in the trucking industry, but this is optional for all programs.
  • Vehicle Mileage: Trailer financing companies are more likely to provide loans for low-mileage tractors than high-mileage tractors, though this is optional for all programs.
  • CDL: You will likely need to acquire your CDL before attaining trailer financing.

If you meet all of these qualifications (or if the program you are considering does not require them), trailer financing is an option for you to consider. At Finloc USA, we specialize in helping future indecent truckers acquire the capital they need to get their business running, and we have numerous financing options available for you to choose from. If trailer financing is the only standing between you and your trucking career, we at Finloc USA can help!

Finance Your Tractor-Trailer With Trailer Financing From Finloc USA

At Finloc USA, we proudly offer fast and flexible financing to indecent truckers across North America. With over 45 years of experience in heavy equipment financing, we know what it takes to get our customers on the road as quickly and hassle-free as possible. And with the flexible financing options in the industry today, you'll be able to choose a payment schedule that best suits your business.

Download a credit application today to get started partnering with Finloc USA to secure the funding you need to pursue your trucking career. Once your credit application is submitted, a Finloc USA representative will reach out within 24 hours to discuss the loan options available and help you get your business up and running.

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