Loans meant for trucking companies are called Owner-operator Startup Loans. Starting an owner-operator trucking business requires a lot of capital. There is a need to pay for registration, and purchasing the trucks and other equipment, and these are capital intensive. If you lack the resources to launch your owner-operator startup, there are business loans offered by financial institutions to ease your burden. These Loan options are available based on financial capability or business needs. It includes short-term Loans, Small Business Administration (SBA) Loans, etc.
Each Loan option offers different services. Before picking a Loan provider, consider
- The interest rate
- Repayment terms
- Amount of the loan.
Some Loans are best for
- Equipment financing
- Short-term trucking business financing
- Working capital.
Consider all these before choosing your Loan provider. Some of the owner-operator startup Loan providers are:
- Lendio
- Bluevine
- Ondeck
- Smartbiz
- Fundbox
- South End Capital
- Crestmont Capital
Lendio
- When you provide your information to them, they match you up with lenders, compare all the options, and finally present to you the best option.
- Lendio provides short-term Loans, startup Loans, SBA Loans, etc.
- However, fund disbursement may take up to 4 weeks.
- To take a Loan from Lendio, you must have a minimum credit score of 560.
- An owner-operator can borrow up to $500,000 from Lendio, with a repayment period of 24 months.
Bluevine
- The credit limit Bluevine has is $250,000 and this can be used for any need in the trucking business. It can be used for equipment purchases, emergency repairs, operational cost capital, etc.
- Their Interest rate is from 0.3% to 6.5%. It depends on the length of time for repayment and your creditworthiness.
- A credit score of 600 is the least credit score to qualify for a Loan at Bluevine.
- In addition, the business must be at least 6 months old and generate monthly revenue of $10,000 minimum.
Ondeck
- Ondeck provides Loans for equipment purchases and Lines of Credit for operational costs.
- The Lines of Credit Loans are up to $100,000 but have a short repayment period of 12 months.
- The Loan for equipment purchase, called a term Loan, is up to $250,00. The repayment period is 18 months.
- A minimum credit score of 600 is required to qualify for this Loan.
- The owner-operator company must have been operating for a year before a Loan application can be granted.
Smartbiz
- Smartbiz collects your information and connects you with banks and non-bank lenders for a Small Business Administration (SBA) Loan.
- The application can be easily done on their website to secure the funding you need.
- Funds can be up to $5 million. The Interest rate is low the and repayment period is long.
- The Loan received can be used for a variety of reasons like business expansion, credit for operational costs, equipment purchase, etc.
- Fund disbursement can be done within 7 days but it may also be longer than that.
Fundbox
- Fundbox is often used by trucking business owners who have bad credit.
- Funding can be up to $150,000 and can be used to cover any expenses within the business.
- To qualify for a Loan at Fundbox, you need to have a minimum credit score of 600 and annual revenue of $100,000.
- Documents from your bank showing business transaction history also need to be submitted.
South End Capital
- This is best for equipment financing and SBA Loans.
- South End Capital can give up to $5 million to borrowers with a minimum credit score of 650
- They have a long repayment period, which can be up to 10 years
- For an owner-operator, relevant industry experience is required before the Loan application can be approved
Crestmont Capital
- Crestmont Capital is best used for equipment financing.
- They provide both Loans and leases to trucking businesses
- The maximum loan amount at Crestmont Capital is $2 million, with a repayment period of 10 years
- The minimum credit score to qualify for a loan is as low as 500
Tips for Getting a Trucking Loan
- Always separate your business account from any personal account. This is because some lenders will request for business bank statement before disbursing funds.
- It is good to have a good credit score when applying for a trucking Loan. Always pay your bills on time to improve your score.
- Cut off unnecessary expenses. Lenders will use it to determine your repayment ability.
Conclusion
Depending on what you need a trucking Loan for – equipment purchase, expansion, credit for operational cost, ensure you apply for a loan that suits your need. Also consider the repayment period, Interest rate, credit score, and other essentials before making your choice.
FAQs
- Can Loans be gotten with bad credit?
Yes. There are Loan options that lend to people with bad credit, e.g., Fundbox.
- Is there a penalty for payment default?
Yes. Trucks may be seized as a form of penalty.
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