What You Need to Know about Commercial Truck Financing

Updated on:
July 31, 2023

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For small business owners in the trucking industry, obtaining a commercial truck is often a significant investment that requires careful consideration. Whether you’re expanding your fleet, starting a new trucking business, or replacing an old vehicle, securing the necessary funds is crucial. In this article, we will explore the essential factors to weigh when acquiring semi-truck financing.

Exploring Financing Options: Traditional Banks vs. Alternative Financing Companies

Small business owners seeking commercial truck financing have multiple options, including traditional banks and alternative financing companies. Traditional banks often have stringent eligibility criteria and lengthy application processes, making it challenging for owner-operators with less-than-perfect credit or startups to secure funding. On the other hand, alternative funders, such as online funders or merchant cash advance providers, offer more flexible financing options/financing requirements and an easier application process. These alternative financing companies often don’t look as closely at paperwork like tax returns or personal credit score either, rather they want to understand your monthly and/or annual revenue.

Moreover, small business owners seeking commercial truck funding should understand, unlike semi-truck loans or lines of credit, MCAs are based on your business’s future sales, making them accessible to everyone with varying credit scores – whether you have good credit or bad credit. The repayment structure is tied to your projected revenue, providing greater flexibility during periods of fluctuating cash flow.

Required Documentation for Funding

When applying for commercial truck financing, the types of documentation to support your application depends on the type of financing you need. While the specific requirements may vary among funders, common documentation for loans includes business and personal tax returns, bank statements, proof of business registration, and truck insurance information. Whereas MCA funding is more simple – bank statements, accounts receivable, and proof of business ownership is often enough to get approved. Having these documents readily available streamlines the application process and increases your chances of approval.

Understanding Repayment Terms

Before entering into any financing agreement, it’s crucial to comprehend the repayment terms offered by the funder. Traditional banks typically offer fixed repayment terms, while alternative funders often employ more flexible repayment structures based on your business’s cash flow. Repayment period* via monthly or daily payments should be carefully evaluated to ensure they align with your business’s financial capabilities. Likewise, the cost of capital, (which can be determined by examining the factor rate for an MCA or interest rates when dealing with loan products) should also be be carefully gauged.

Is Commercial Truck Leasing a Good Option

Equipment loans from banks can take weeks if not months, which is why some truckers turn to commercial truck leasing. Others consider this financing option because they are concerned about what might show up on their credit report such as tax liens, thus not being able to secure any loan offers. Rather than commercial truck leasing which can be costly, this is a great time to look at alternative funders and merchant cash advances. Their application process is less stringent, making it faster, and their qualifications are less burdensome. Moreover, with an MCA, CDL drivers, can request enough funding to cover the cost of the commercial vehicle or truck, as well as extra to use as working capital.

Selecting the Right Commercial Vehicle

This should not come as a surprise to truckers, choosing the right commercial truck is essential for the success of your trucking business. Factors to consider include the type of truck (new semi-truck, new box truck or used truck), the truck’s condition and mileage, fuel efficiency, and maintenance costs. Additionally, you should assess the truck’s suitability for your specific business needs, such as cargo capacity, route requirements, and any specialized equipment necessary.

The Significance of Down Payments

When acquiring a commercial truck, one of the most critical aspects to consider is the down payment. The upfront amount you contribute can impact your financing options, monthly payments or daily payments, and overall financial health. Some potential funders consider a substantial down payment a demonstration that your committed to the investment, while others simply don’t care.

What if I Don’t Have a Down Payment

It’s important to remember, there are differently types of fleet financing available. Some require down payments while they check you credit history, annual revenue, and the type of truck you wish to purchase. But don’t worry if you don’t have strong credit, even if your FICO score is not close to perfect, there are still business financing options available. Likewise, if you don’t have any money down, that’s okay too. In these cases, it’s likely better to look alternative funding rather than a commercial truck loan.


When acquiring a commercial truck for your trucking business, it’s crucial to consider the various factors discussed in this article. The significance of down payments, exploring financing options, understanding repayment terms, and selecting the right commercial truck are all crucial elements to make an informed decision.

*Repayment in this context describes the process of repurchasing a merchant cash advance. It does not describe the process of repaying a truck or auto loan. MCAs are legally distinct from loan products.

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