Owning and driving a semi-truck can be an expensive endeavor. Beyond the money needed to buy the truck itself, there are also repairs, which can be very costly. If you run a trucking business, the costs for repairs can add up fast. Luckily, there are several financing options for semi-truck owners who need help paying for truck repairs.
Read on to find out how to get the best semi-truck repair loans for your needs.
Common Reasons Owner-Operators and Professional Truck Drivers Need Truck Repair Financing
Commercial trucks tend to get a lot of use during the week, driving thousands of miles for a variety of purposes. But high mileage is a good indicator of common breakdowns and needs for repair in all automobiles. Ongoing, regular maintenance is key to ensuring that your semi-truck or commercial fleet are road-safe and functioning properly. But even with regular tune-ups, commercial trucks can start to show expensive signs of wear and tear.
Some of the most common reasons commercial truck drivers and owner-operators need financing is for these costly repairs:
- Brakes — overheating and wear and tear on brakes is one of the leading causes of accidents with semi-trucks. Maintaining brakes and repairing them is an important step in ensuring truck safety, but the costs can add up.
- Engine overheating — once again, high mileage and long distances mean your commercial truck engine has ample opportunity to overheat, which can lead to costly repairs.
- Starter — starters can cause major problems for drivers and need to be tested often, especially in colder months.
- U-joints — because they transfer transmission power to the differential, u-joints carry a heavy burden and need to be properly lubricated. Drivers should be aware of clicking or vibrating when driving, as these can be signs of a failing u-joint.
- Wheel bearings — these important components keep the wheels of the truck moving, and if the driver notices noise from the wheel wells or any jerky movements during driving, it’s a sure sign to get the wheel bearings checked.
Benefits of Getting a Truck Repair Loan
Getting small business loans or financing for your truck repair can open a number of benefits to you, beyond the ability to pay for your repairs quickly. You can also open up cash flow for other business expenses, or increase your working capital to help you expand your trucking business. Paying off a small business loan can help you build credit for your business, too, which may help you in the future if you want to get more financing or expand your business further through equipment leasing or other options. It can also help you get better rates and repayment terms if you decide to undergo refinancing.
Types of Truck Repair Financing
There are several types of truck repair financing. Finding the right option for your business is important. Some common types of loans for truck repair include:
Equipment Financing for Truck Repair
Many trucking companies will use equipment financing to help pay for repairs for their fleets. Equipment financing tends to be a short-term loan to cover the cost of repairs. There are a lot of online lenders that offer equipment loans, which can make for a very simple application process. Many truck leasing companies offer equipment financing to truckers, too, but use the truck as collateral.
Business Line of Credit for Truck Repair
Unlike a traditional loan, a business line of credit allows you to borrow only what you need and pay interest on that. Also, every time you pay it off, you tend to get to use the credit again. This is a good option for those in the trucking industry who have a fleet of trucks to manage and have expensive repairs often.
Business Credit Card for Auto Repair
Business credit cards can be a good option for truckers and trucking companies who need to pay for repairs and want to earn points or rewards while doing so. It’s important to find a credit card with an annual percentage rate (APR) that works for your budget, but often a credit card’s approval process is less strict than other financing options.
Title Loans for Truck Repair
If you don’t have great credit and need financing for automobile repair now, a title loan is an option you may consider. In this type of financing, your truck would be used as collateral, so the risk is if you can’t pay off your loan, the lender would take your truck. These loans tend to have high interest rates, as well.
Personal Loans for Truck Repair
If you’re an owner-operator, you may consider a personal loan to cover your semi-truck financing needs. Personal borrowers can get attractive interest rates and repayment terms, especially with good credit, but you may not be able to get as much money from a personal loan as commercial truck loans could give you.
Capital Loan for Semi Truck Repair
A capital loan is like other business loans, but can only be used to improve a piece of property. If you’re a truck driver or trucking fleet owner, this would mean you could use the capital loan to repair your truck or trucks, but not for operating expenses.
How to Select the Best Loans for Your Needs
Getting the best truck repair loan depends on multiple factors. It’s worth doing your research on your loan options to find the right lender for your commercial vehicle repairs.
A few things to consider when researching your loan options include:
- Your credit score — your business and personal credit scores will affect which types of financing you qualify for, from which lenders, and for how much. While bad credit doesn’t mean you can’t get a loan or other financing, it can affect your interest rates and repayment terms. Knowing how to establish business credit can help you get better terms for any loans you may need for your business.
- Your credit history — how long you’ve been in business or how long you’ve been building credit can affect your ability to qualify for loans or credit.
- Loan amount — how much do you need? How much can you qualify for? And how much can you afford to pay per month?
- Down payment — some lenders require money upfront to reduce their risk in lending to you. It’s a good idea to know how much you can afford and what you’re willing to pay.
- Interest rates — your credit score will affect your interest rate, but it can vary by the type of small business loan you get as well as the lender you choose, so keep that in mind.
- Repayment terms — like interest rates, this will depend on your qualifications, but shorter repayment terms can mean higher monthly payments, while longer repayment terms can mean higher interest rates. Also, some lenders may penalize you for paying a loan off early, which is something you need to consider before you sign for it.
Many truckers and trucking business owners don’t think they can qualify for financing due to poor credit or other issues. While it’s true that your credit score can seriously affect your ability to qualify for a loan or other financing, it’s not a definite barrier to entry. But it may make the loan terms less desirable for you, so it’s important to double check all the requirements before you take on financing.
Get Matched With the Best Truck Repair Loans for Your Needs
Knowing which loans you qualify for can help you save time on the application process upfront and reduce hassle in the long term. Nav provides small business owners with personalized recommendations on financing based on your business and personal credit scores, credit history, annual income, and a number of other factors. In fact, business owners who use Nav are 3.5x more likely to get approved for the financing they apply for. Sign up today to see your options.
This article was originally written on June 10, 2022.
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