Top Dump Truck Financing Options in 2020

Top Dump Truck Financing Options in 2020

Top Dump Truck Financing Options in 2020

Dump trucks are useful tools to have in a number of industries. Often, entrepreneurs are faced with deciding whether it makes the most sense to purchase, lease, rent, or sub-contract a dump truck. Buying a commercial vehicle like a dump truck is a big commitment that involves a significant financial investment. That’s why most business owners look for dump truck financing options when they’re ready to own. If you’re looking to become a dump truck owner, this article will help you navigate the financing process.

Dump Truck Financing for 2020

Commercial vehicle financing works a lot like a paying off a car, except the price tag is higher. One of the most popular means to purchase a dump truck is by using a commercial truck loan. This type of loan is available through traditional bank lenders and alternative lenders. The vehicle itself serves as collateral on the loan, which means the creditor can repossess the truck if your business fails to make the agreed-upon loan payments. Because of this, interest rates tend to be lower and monthly payments more affordable. Additionally, businesses with less-than-ideal credit may be able to access this type of loan more easily.

A lease is another option to consider if your business wants to invest in work trucks. Many conventional bank lenders offer dump truck leases along with specialized commercial truck financing companies. As with any vehicle lease, a business makes payments in exchange for use of the truck for a certain amount of time. At the end of the period, the company has the option to turn the truck in or purchase it for the residual value (otherwise known as a TRAC lease). Some people prefer leasing because the truck is generally returned before they have to deal with significant maintenance or depreciation. Additionally, monthly payments are typically lower than a loan, making this option more affordable from a monthly cash flow perspective. Though, higher interest rates might consume any cost-savings.

Equipment financing can also help a business obtain a dump truck. Some lenders may consider a dump truck heavy equipment and handle financing of this hard business asset as they would other machinery like construction equipment or commercial hardware. Traditional banks, alternative lenders, and specialized equipment creditors offer heavy equipment financing programs. Since the truck itself acts as collateral, this option is more easily achieved than some alternatives. Often, a borrower will need to make a small down payment on the equipment as part of the financing agreement.

Options for Commercial Vehicle Financing

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If you’re searching for dump truck financing options, the Internet is a great place to start. You can quickly compare offers and determine the most favorable rates for your business. You can also efficiently begin the application process to ensure you get the funding required to put your truck on the road as soon as possible. Nav has qualified a number of trusted partners offering personalized business financing options that meet an array of business needs. From SBA loans to invoice financing to business credit cards, Nav can help connect you with lending partners to help grow your business, including BlueVine, OnDeck, American Express, and Kabbage.

Below, we’ve included information on some of the most popular alternative lenders that offer small business loans and dump truck financing.

Balboa Capital

Online lender that provides equipment loans, business loans, and lines of credit to growing companies.

Rates: Average 13%
Requirements: One year in business, $100K annual revenue, “decent” FICO credit score
Amount:    Up to $250K
Pros: No collateral, same-day funding, flexible term lengths
Cons: No short-term financing, sometimes confusing terms

 

Crest Capital

National creditor with a focus on funding equipment, vehicle, and software purchases for small businesses.

Rates: Around 5%
Requirements: 24 months in business, minimum 650 credit score
Amount:    Up to $500K
Pros: Minimal paperwork, few restrictions, A+ BBB rating
Cons: Administrative fee

 

CAG Truck Capital

Lender specializing in the trucking business. Exclusively offers commercial vehicle and engine overhaul financing.

Rates: As low as 10%
Requirements: Dependent on credit report and business history
Amount:    Dependent on credit report and business history
Pros: Online application process, early payoff options, entrenched in trucking company needs, bad credit OK (even history of bankruptcy and tax liens)
Cons: Less affordable for individuals with bad credit

 

Additionally, the financial establishment where your business currently banks (whether a large national bank like Wells Fargo or a small local credit union) may have vehicle loan or equipment loan programs to assist you with buying a dump truck. The dealership where you purchase the truck might also work with partner lenders to support financing and offer incentives like deferred payment.

How To Qualify for Dump Truck Financing

Before you begin the truck financing application process, take some time to gather the items you’ll need to be approved so you won’t be scrambling when lenders request them. Some of the things most banks and alternative lenders require include:

  •     Personal identification like your driver’s license or passport
  •     Relevant business licenses, including state and local registrations as well as any specific to your industry
  •     Legal entity documents if your business is a partnership or corporation
  •     Employer Identification Number, which acts like a Social Security Number to distinguish your business
  •     At least two years’ worth of tax returns
  •     Current bank statements
  •     Recent cash flow statements

Prior to starting the loan application process, it can be helpful to review your business credit report so you know your business credit score and what your chances are of obtaining more favorable rates. Reviewing your credit report ahead of time also gives you an opportunity to check for mistakes and remedy them before applying. You can access your free business credit scores online via Nav.

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Is It Possible to Qualify for Commercial Vehicld Financing with Bad Credit?

Yes, you can finance a dump truck without good credit or a lengthy credit history. However, you may not be able to land the most attractive rates and you may need to put up a sizeable down payment. Because the truck itself serves as collateral when financing a vehicle like a dump truck, some of the risk is removed for the creditor. Certain alternative lenders use unconventional loan qualifications, looking beyond your credit at things like cash flow health and existing purchase orders. If your company is a startup, the moneylender may measure your personal credit records.

How Many Years Can You Finance a Dump Truck?

Dump truck financing terms typically last from about 36 to 60 months.

Is Used Dump Truck Financing Available?

Used dump truck financing is available, though not all lenders will fund a loan for a used truck. In most cases, the creditor will want to review an appraisal of the vehicle (evaluating things like fuel efficiency, mileage, and maintenance history) before committing to a loan, in addition to their standard application materials. Specialized industry lenders and online lenders may be more amenable to financing used vehicles than big banks.

How Can I Grow My Trucking Business?

Whether you’re looking to lease one semi truck or purchase a commercial fleet, there are a number of finance options to help you expand your business. From traditional bank loans to cash flow loans to merchant cash advance opportunities, lending can help your company get the money it needs to reach its next milestone. Ask your accountant, financial advisor, or trusted dealer which finance approach might work well for your business.

Nav’s Final Word: Dump Truck Financing

When you’re looking to add a dump truck to your company, the first step in the process is to decide whether a loan or a lease makes the most sense for your business. In some situations, you may also be able to finance your truck as a piece of business equipment.

Because the dump truck stands as collateral, many lenders are more forgiving with these loans, allowing companies that don’t meet standard lending requirements to finance a vehicle. However, in most cases, poor credit will equate to higher interest.  In addition to traditional banks, there are alternative lenders and specialized industry lenders that offer dump truck financing.

Thorough preparation will ease the application process no matter what type of loan you are aiming for. Be sure to round up all relevant documentation and do a check of your credit report. With a little groundwork, planning, and research, your company will be adding a shiny new (or used) dump truck to its operations in no time! 

This article was originally written on March 12, 2020.

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ABOUT AUTHOR

Ty Kiisel

Ty Kiisel

Ty Kiisel is a Main Street business advocate, author, and marketing veteran with over 30 years in the trenches writing about small business and small business financing. His mission at Nav is to make the maze of small business financing accessible by weaving personal experiences and other relevant anecdotes into a regular discussion of one of the biggest challenges facing small business owners today.

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