To begin, a person must consider the truck finance requirement, when looking into getting a heavy vehicle loan. If you are a trucker by profession or an aspiring one, your dream of owning a truck is possible, if you are familiar with the proper steps.
At Asset Finance Shop, we help make the transition as smooth as possible. Moreover getting a truck loan from the bank can be demoralising and complicated. However, don’t let this stop you on your mission of getting a truck; there are other financial options available.
Most lenders will grant a loan using the truck as collateral. The on you will determine the interest rate for your investment. Newer models take an interest of 5% while an older vehicle can go even up to 30%.
Let’s take a look at the requirements of truck finance:
Condition of the truck
Semi trucks are used to transport cargo over long distances, and this causes a lot of wear and tear. However, if the vehicle is relatively new; the lender will finance most of the cost with a low-interest rate on loan. Some key points include:
- The kilometres plus repairs carried out on it determines the funding one will get.
- A truck with less than ten years on it and range of fewer than 700,000 kilometres will cost less
- Whether it has any damages
- Lenders will require some down payment put down, especially when funding an old truck.
- The lender information includes; the truck’s kilometres, significant repairs that it has undertaken in the past, and the age of the truck you want them to finance.
Your taxes and any other loan shows that you are a responsible person who honours his credits. When you have not paid a previous loan payment or been declared bankrupt, your credibility is low, and it can be tricky to finance a truck.
- Having a good credit record goes a long way in convincing the lender that you are a credible person.
- A good track record also helps in getting low-interest rates on your loans.
- Keep a record of your payments and ensure your books are regularly updated.
- Show proof of ownership, bank statements and business licenses are helpful while applying for truck finance
A long-standing business usually has higher chances of getting funds quickly. But this should not deter you from seeking financing for your business even if it is less than two years.
With a growing business, all you will need to know is that your interest rate will be a bit higher as compared to other companies.
Have a business score of 650, or higher and lender will give you reasonable rates on your loan.
- Vendor Trucks
It can help to get your truck from a well-known or reputable vendor. Trucks from reliable vendors provide the lender with a good paper trail and the guarantee of their condition, as compared to buying privately.
It is always advisable to have a nest that you can always fall back on if things don’t work out. You can also ensure you have some cash flow for when the truck requires repairs. Have some funds saved somewhere that you can use to finance your repayments or perform repairs when the prime mover is out of commission.
Show the lenders that you can manage to repay their money even if your truck goes out of business. Moreover, Provide a bank statement showing funds on your account.
If your reserve is too low, show the lender how the truck is going to make money.
Ensure that you have an insurance policy in place before getting financing from lenders.
Semi-truck business is a risky one with the rate of accident high, and this calls for insurance to be in place.
Take an insurance cover with the type of business you are running at the back of your mind.
Get a cover that covers the truck and another to cover the employees if there are any.
Take your Time looking and get a lender like Asset Finance Shop, who will understand your business goals and where your business is heading. The
Trucking business can be very profitable if managed well, and the truck is regularly maintained. Start earning as soon as you get your vehicle, contact us now and see how we can help you in your venture.