1.Is it easier to obtain commercial truck financing?
2. If I have bad credit, will I still qualify for a loan?
Well, a credit score is used by lenders to determine your payments more than whether you qualify. Your credit standing, alongside your business history and the vehicle’s value, will determine the amount you are eligible to borrow and the interest rate on the loan. The more risk factors you have, the higher your down payment will be.
For example, if you have been an owner-operator for two years with solid revenues and decent credit, you may qualify for up to 100% financing. If you are new in the business, you have to put a down payment that ranges between 10% and 30%, depending on your credit and business history.
3. How old is “old” when financing used trucks?
There is no rule on how old a vehicle to be financed should be. Some lenders would prefer trucks that are less than 10 years old while others would finance trucks that are 20 years old. The more important concern would be the condition of the truck, i.e. if it breaks down frequently and the impact of the age of the truck on the collateral value.
It is primarily for repairs that lenders require cash reserves in addition to down payments. Cash reserves also protect owner-operators during lean months or when the truck needs additional repair.