Best Semi-Truck Financing Options of 2022 – Forbes Advisor

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Reliable vehicles can make or break your profit margin in the commercial trucking industry. However, with new semis ranging from around $100,000 to over $200,000, most trucking companies have to borrow money to cover equipment costs. You may need to find reliable semi-trailer financing resources if you want to keep a fleet of trucks or yourself on the road.

Best Semi-Truck Financing Options

Wells Fargo Commercial Truck Loan

Good for: Several financing options

Why we chose it

Wells Fargo offers commercial transportation financing options starting at $100,000. You can use a Wells Fargo commercial truck loan to buy or lease many types of equipment (new or used), including tractor-trailers, trailers, tankers, tow trucks, and more.

Qualified borrowers can receive up to 100% financing. The bank also offers repayment terms of 12 to 84 months on term loans, leases, equipment lines of credit, lease-purchase agreements and other financing options.

Advantages and disadvantages

American bank truck loan

Good for: No deposit

US Bank issues truck loans of up to $1 million. Eligible borrowers can receive up to 125% financing, with additional financing available to cover costs such as taxes, setup fees, and transportation costs.

You may be able to get a commercial vehicle loan with no down payment from US Bank. Repayment terms vary from 24 to 60 months or more. The bank also allows applicants to prequalify for truck loans of up to $500,000.

Advantages and disadvantages

Bank of America Commercial Truck Loan

Good for: Low rates

Bank of America offers loans and leases for the purchase of commercial equipment starting at $25,000. You can benefit from repayment terms of up to five years when you secure your loan with business assets.

Fixed interest rates start around 6% for well-qualified clients. Professional borrowers can also benefit from an additional discount (0.25% to 0.75%) through the bank’s Preferred Rewards program.

Advantages and disadvantages

Balboa Capital truck loan

Good for: Same day financing

Balboa Capital offers alternative truck loans to borrowers who need financing to purchase tractor-trailers, trailers and other commercial vehicles. You may be able to borrow up to $500,000, depending on the type of collateral you have to offer and other qualifying factors.

The lender requires borrowers to have a minimum FICO score of 620, which is considered a fair credit score. If the lender approves your application, you may be able to access the funds the same day you apply.

Advantages and disadvantages

First Capital Business Financing

Good for: start-up

First Capital offers several commercial truck financing options for established trucking companies and startups. The lender places no year or mileage restrictions on vehicle purchases, and you may qualify for financing with no down payment.

The online lender also works with personal credit scores as low as 620. However, loan limits are more restrictive than you might encounter elsewhere, ranging from $10,000 to $100,000. Remember, if you’ve been in business for less than two years, you can’t borrow more than $49,000.

Advantages and disadvantages

CAG Truck Capital: good for bad credit

CAG Truck Capital is a private lender that provides commercial truck financing to borrowers with good or bad credit. If you qualify for financing, you may be able to use a loan from CAG Truck Capital to purchase a new or used tractor-trailer of any make or model.

The lender is ready to work with several credit issues, including bankruptcy filings. However, you can’t find much information on the lender’s website about available Annual Percentage Rates (APRs), repayment terms, or exact qualification requirements. It is therefore important to compare any loan offers you receive from other lenders to ensure that you are getting a good deal.

Advantages and disadvantages

Commercial Fleet Financing: Good for Quick Approval

Commercial Fleet Financing offers equipment financing for tractor-trailers, trailers, box trucks, construction vehicles and more. It does not disclose the interest rates it offers online, but repayment terms vary between 36 and 108 months (three to nine years).

You may not need to sign a personal guarantee – meaning you become personally responsible for repaying the debt if the company cannot – for a truck loan from Commercial Fleet Financing, depending on the term of your activity. And if you’re borrowing less than $150,000, you won’t have to provide a tax return with your loan application either.

Advantages and disadvantages

Truck Lenders USA: good for several types of equipment

TruckLenders USA offers financing for almost any type of commercial equipment, as long as it has wheels, a valid title, and is no more than seven years old. Loans range from $15,000 to $250,000, and giant lender leases are available for up to $1 million.

Repayment terms with TruckLenders USA vary from 24 to 60 months for borrowers with credit scores of at least 675. You will also need to provide a small down payment, depending on the lender; however, it does not specify how many.

Advantages and disadvantages

What is semi-trailer financing?

Semi-trailer financing is a loan or lease that helps you spread the cost of a commercial vehicle over time. As you repay the funds you borrow, you will also pay interest and any fees to your lender.

How does semi-trailer financing work?

Commercial truck financing is similar to a personal auto loan in several ways. For example, most tractor-trailer loans have fixed interest rates and fixed payments, just like car loans. The vehicle you purchase will generally serve as collateral for the loan in both scenarios.

With tractor-trailer truck financing, however, you may need to provide a personal guarantee to qualify for a loan. Additionally, depending on the lender’s credit reporting policies, a tractor-trailer loan can impact your personal and business credit scores.

Banks vs direct lenders vs alternative lenders

Several types of lenders offer commercial equipment financing. So if you need to get a loan or lease for a semi-trailer truck, you will have a few options to consider.

  • Banks and credit unions can offer attractive interest rates and repayment terms. But good credit, more time in business, and a higher annual income may be needed to qualify for these financing options.
  • Direct lenders are companies specializing in truck financing. These types of lenders might accept borrowers who would have a harder time qualifying for a bank loan. But it’s important to compare interest rates, fees, and other terms to find the most affordable financing solution.
  • Alternative lenders are often based online with no physical branches you can visit. Although they don’t have specific expertise in truck financing, potential borrowers who value online-only banking services may prefer this type of lender.

How to get financing for a semi-trailer

Finding the best financing solution for your trucking business is a multi-step process.

  1. Check your credit. Most lenders will look at your credit report and credit score when you apply for a tractor trailer loan or lease. Knowing your credit status ahead of time can help you determine which financing options might be right for you.
  2. Compare lenders. Take the time to compare several lenders and loan offers. Pay close attention to interest rates, fees, loan amounts, and other details to find the best deal.
  3. Get pre-approved. Next, see if a pre-approval option is available. Getting pre-approved can help you find out what interest rate and terms the lender may be offering you and if you’re likely to qualify.
  4. Apply. When completing a formal loan application, be prepared to provide information about yourself and your business, as well as details about the vehicle you wish to finance. You may also need to submit documents to verify that the information on your application is accurate, such as tax returns, bank statements (business and personal), etc.

Find the best small business loans of 2022

Frequently Asked Questions (FAQ)

Can you finance a tractor-trailer with bad credit?

Some lenders may be willing to provide semi-trailer financing to borrowers with bad credit. But you should expect to jump through more hurdles and pay more for financing in these situations.

Is it better to lease or finance a tractor-trailer?

Whether you’re leasing a tractor-trailer or taking out a loan, you’ll need to factor monthly payments into your business budget. The best option for your business will depend on factors such as cash flow, future business plans, expected vehicle usage and more.

What credit score do I need to finance a tractor-trailer truck?

Lenders set their own requirements for credit score minimums. You may be able to finance a tractor-trailer with a credit score below 600 with some lenders, while others may require a credit score between 600 and 600.

Where can I get semi-trailer financing with no down payment?

It’s not impossible to find lenders that offer no down payment required semi-trailer financing, including some of the financing options listed above. But you may need to meet other requirements to qualify for no down payment financing, such as having a higher minimum credit score, more time in business, etc.

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