You are all set to expand your existing transportation business. You plan on purchasing new trucks and think about commercial truck financing options. Wait, before you think about hitting the internet to search for credible agencies, you need to first do your homework.
First of all, you need to determine what type of truck you need. Each company has its own eligibility criteria, when it comes to loan application. Here is where you might have to struggle a bit to determine whether you fit their bill or not. Here you might have to check your credit score. Many financial institutions or banks approve your loans if they find you have a good credit score.
If you have already finalized a bank, then you might want to enquire what the credit score required to get a loan is. If in case you have a poor score, then you need to have people who can vouch for you and convince the banks to approve your loan.
Other important factors that banks or financial institutions look out for are how many years you have been in business. The older your business, the more brownie points for you. Ensure that you have your documentations ready. Some of the proofs that might be required would be:
- Your bank statements
- Your business registration papers
- Driver’s license
- Loan statements if you have applied for any
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Evaluate Your Finances
Depending on what type of business you own, you need to evaluate how much money will be needed to purchase your truck. Secondly, if you can even opt for semi financing options, provided you have sufficient funds to invest in your truck. Many a times, financial institutions might even want to evaluate your assets and liabilities to determine your financial position.
Ensure that you do a thorough analysis of all these documents with your finance department before applying for a loan. Secondly you might even want to know what type of loan options is available for you. The most common ones are:
- Truck Rental – Where the financier will purchase the truck on your behalf and rent it out to you for a fixed period
- Truck Hire Purchase – Here you get to hire the truck from the financier on a fixed monthly repayment
- Chattel Mortgage – Here, the financier provides the funds to you and you have complete ownership of the truck
Under chattel mortgage, your bank will take a mortgage over your vehicle as a loan security. The mortgage will then be removed, once you are able to pay off the complete amount for your vehicle.
Choose the Right Financing Companies
Now that you have evaluated your options, you need to start research for good and reputable financing companies. Ensure that you take your time visiting their website and learning more about their nature of work.
Check online reviews and see their ratings. Call them up and see how quick and prompt their customer service is in answering your queries.