The most commonly preferred means of transportation for goods includes trucks. The commercial truck industry revolves round the vehicles that each company manages, and such companies can really benefit from commercial truck financing experts. These experts make your purchase of trucks easy with the help of their funds. There are many companies who are willing to provide loans for businessmen to buy trucks. This money which is loaned needs to be returned in certain installments along with interest to the companies who lend the money in the first place.
This is how commercial truck financing procedure operates: you get financed by a company to buy a truck which becomes yours, only after full re-payment of loans.
Top Three Factors in Relation to Commercial Truck Financing:
For the core of commercial truck financing, the whole process can be divided into three parts for an easier understanding of how loans work which are:
- Down payment: The initial lump of money which the customer pays to the financing company is the down payment, which is also a portion of the total cost of the truck.
- Interest rate: The particular company will charge you a certain percentage of money on top of the total loan that you take which needs to be paid over time.
- Loan term: The total time which has been given to the customer to pay the loan back. Failing to which there could be dire consequences, like losing your truck.
Advantages of Commercial Truck Financing Over Banks:
There are many different types of trucks like Semi trucks, tow trucks, dump trucks. Banks usually do not provide loans for the purchase of semi-trucks. Semi-truck is a type of commercial hauling truck and they have a track record of breaking down too often. On the other hand, they have a huge number of competitors. So bottom line, banks aren’t willing to take the risk. On the other hand, commercial truck financing companies most definitely are willing to take a risk.
Other benefits include:
- Faster Approvals: Now these companies only deal with commercial truck financing and as a result of which they know which documents to look for and how to process them as fast as possible. The banks come nowhere near to the speed these companies possess in this regard.
- Lower Down Payments: Banks don’t quite understand the business of lending money for commercial truck financing and as a result of which ask for huge down payment which makes it very difficult for the customers. On the other hand, the financing companies know the business inside out and know that there is a certain limit to the down payment for which they can ask for.
- Lower Collateral: Banks usually ask for huge collateral. Collateral refers to something which the loaning party will take if in any case, you fail to pay the loan. Banks can ask for collateral as huge as 50% of your home whereas the companies are much more reasonable with their approach.
- No Tie Up: If you take the loan from commercial truck financing you will be able to lease these trucks without having to tie up your company’s working capital or business credit lines with the loan provider. This allows you to use your financial resources towards other aspects of your business.
Hence, it is a no brainer than commercial truck financing companies are a much better option when it comes to taking loans for a truck. Banks will extract a lot of money from you as down payment which you might not be equipped to pay, but with the commercial financing, you’re asked for a reasonable sum and saved from all the hassles of lengthy paperwork and unprecedented delays. The companies are much more reasonable and understanding than the banks and as a result, your business will only bloom under them.
