Advertiser & Editorial Disclosure
Transportation companies face many challenges:
- Labor Shortages: there may be a shortage of 160,000 drivers by 2028.
- Regulations: fuel economy, hourly limits, and logging devices can add up.
- Compliance: safe parking is scarce and accidents are on the rise.
- Cash Flow: it can take up to 90 days to get paid.
- The Cost of a Commercial Truck: one truck can cost hundreds of thousands of dollars. A fleet costs even more.
Having access to working capital would solve some of these obstacles, but it’s a matter of finding the right financing solution.
What You Need to Know About Trucking Business Loans
Before you jump into a trucking business loan, weigh both the benefits and drawbacks.

Pros
- No cash collateral required
- Low interest rate
- Payment period can be long

Cons
- Truck can be seized if you are unable to pay
- Requires a down payment
- Truck depreciates quickly
Trucking Business Loans Pros
While there are many types of business funding available, none is as custom-tailored for a trucking business as a trucking business loan is! Here are a few of the benefits to consider.
No Cash Collateral Required
Most small businesses don’t have money laying around to fully purchase a commercial vehicle, so the fact that no cash collateral is required makes trucking financing a lot easier. The truck or equipment you are purchasing acts as the collateral.
Low Interest Rate
Because the truck is your collateral, you typically can get a lower interest rate than you can with other unsecured working capital loans. This can help you save on the loan in the long run.
Payment Period Can Be Long
If you’re buying an entire fleet, your loan will be sizeable. The more time you have to pay it off, the less strain that monthly loan payment will put on your profits.
Trucking Business Loans Cons
Every type of financing has drawbacks. Here’s what you should be aware of.
Truck Can Be Seized
Of course, you hope you are able to pay off your equipment loan, but should the unexpected happen, missing a few payments could cost you the truck. Your lender has the right to seize it to cover the outstanding balance, which can put your business in jeopardy.
Requires a Down Payment
While there’s no cash collateral that you need to provide, you will need to make a down payment, usually 5-25%, depending on your credit.
Truck Depreciates Quickly
Like any type of machine, a commercial truck will depreciate in value rapidly. By the time the loan is paid off, you can sell it, but only for a fraction of what you paid.
What is a Trucking Business Loan?
A trucking business loan provides working capital for the purchase of a commercial truck or fleet of trucks, and is available to owner-operators and trucking small business owners with a team of drivers.
Unlike with other types of secured loans, you aren’t required to put cash down as collateral on the loan because the truck you are purchasing is that collateral.
Trucking Business Loan Companies
There are more moving parts than ever within the transportation industry, and it’s likely to get only more complex over time. There’s a huge difference between driving for a business and owning one because, in addition to worrying about regulations and compliance, you’ve also got to make smart financial decisions to keep cash flowing and your business operating smoothly.
To start a commercial trucking company, you’ve got to have a truck. To grow your company, you’ll need a fleet. If your customers aren’t putting money down in advance of receiving an order, you’ve got to put up the cash or take out the commercial truck loan to buy the truck and get the job done. Here are companies that can help.
Advertiser Disclosure
Equipment Lease by TimePayment
Equipment Financing by LendSpark
How Does a Trucking Business Loan Work?
Once you determine that it’s time to buy a truck for your business, you’ll need to prepare before you apply for the loan. In the next section, we’ll discuss the qualifications you need. Once you apply, truck financing companies will review your application to determine first, if you qualify for a trucking business loan and second, what rate you are eligible for.
Because the truck itself is your collateral, your rate for an equipment loan or trucking business loan may be lower than it would be for, as an example, a bank loan. The reason for this is: should you be unable to pay your loan off, the lender has the right to take your truck and sell it as an asset to cover the balance of your loan. It’s risky, but if you are confident that you can pay off the loan, this could be the financing that helps you grow your trucking business.
How to Qualify for a Trucking Business Loan
There are several factors that go into how you qualify for the loan. Each lender has a different requirement for your credit and may look at both your personal and business credit scores as well as your credit history. The higher your scores, the better rates you may qualify for.
You may also be required to make a down payment, typically 5-25% depending on your other qualifications. Lenders may also look at how long you’ve been in business or what your experience is in this industry.
Best Uses for a Trucking Business Loan
There are several situations where you can benefit from having a trucking business loan.
- You’re transitioning from being a driver for someone else to an owner-operator
- You are expanding your fleet of commercial trucks
- You have an emergency that requires you to replace a vehicle
Types of Loans Available for Trucking Companies
While trucking business loans (or equipment loans) allow you to leverage your asset (the truck), there are other financing options to consider.
Some of the following will have more stringent criteria than others, such as SBA and bank loans:
- Be in business 12+ months
- Have a personal credit score of 650+
- Have revenues of $50,000+
If you have bad credit, not to worry. A few of the loans discussed below may still be an option, though they’ll come at a higher cost.
SBA Loans
With some of the best rates around for business loans, SBA loans are offered through banks who will work with you to choose the best SBA lending program for your needs (there are several). While you can usually get longer terms on these loans, you also typically need good credit.
Bank Loans
While many traditional lenders like banks offer SBA loans for trucking businesses, others offer their own financial products. Small business loans can offer great rates, but the paperwork can take a while and the requirements can be high, so plan ahead.
Equipment Financing
A truck qualifies as equipment, so why not look into equipment financing? With equipment financing, your vehicle (or other commercial equipment) acts as your collateral for the loan. Requirements to qualify are typically easier than with bank loans.
Business Line of Credit
If you plan to buy several trucks over time, a business line of credit might be a good fit. It allows you to take out the amount you need when you need it, up to a capped amount.
Merchant Cash Advance
One of the more expensive types of credit, the merchant cash advance appeals to businesses that don’t have great credit. Rather than using your credit scores to decide whether to loan to you, these companies look instead at your revenues before approving you for a short-term loan. They come with high interest rates and short payment terms, so be cautious.
Business Credit Cards
While business credit cards aren’t truck loans per se, they may still come in handy in your trucking business. As you will continually have business expenses but not necessarily money to cover them at the same time, having a business credit card can help you maintain a steady cash flow.
Freight Factoring
Similar to how invoice factoring works, freight factoring allows you to sell an invoice for a load for immediate cash rather than waiting for your customer to pay for it. The freight factoring company will take a percentage of the invoice value in return.
Nav’s Verdict: Trucking Business Loan
If you’re ready to take your trucking business to the next level, a truck loan could provide the working capital you need to rocket you to success. Shop around for the best deal on semi truck financing, and make sure the lending partner doesn’t have parameters about the brand or type of truck you can purchase with the trucking loan.