Where Can I Get Semi-truck Financing?

Jetta Productions Inc/GettyImages; Illustration by Hunter Newton/Bankrate

Semi-truck financing is a type of small-business financing that allows you to purchase a semi-truck for your business while keeping crucial cash flow free. When looking for the right lender, banks, online lenders and direct lenders have loan products that can cover the cost of buying a new or used truck and trailer. Each type of lender has advantages and disadvantages, so it’s wise to compare eligibility requirements and costs before you submit an application.

Let’s take a look at where you can get semi-truck loans and compare some of the top semi-truck financing companies available.

Where to get semi-truck financing

When looking for semi-truck loans, there are three types of lenders most business owners turn to. Each type of lender has its benefits.

Banks

Most banks offer semi-truck financing in the form of equipment financing. These are designed to help businesses purchase major assets, including semi trucks and trailers. Most terms are capped at 60 months (five years), but some are shorter if you want to limit the interest you pay.

While banks can offer some of the lowest interest rates, they usually have strict qualification requirements. There can also be benefits to working with specialized semi-truck lenders that have familiarity with the industry.

Online lenders

Online lenders, a type of alternative lender, operate entirely online and may offer semi-truck financing for borrowers with poor credit, or who need to access capital fast. Some online lenders can provide financing in as little as 24 hours. However, they offer higher interest rates than banks, and a lack of brick and mortar location may make it difficult to manage your loan.

When comparing online lenders, pay special attention to customer service channels. Since everything is done online or over the phone, you want to make sure you have access to help when you’re most likely to need it. It’s also a good idea to compare at least three lenders to ensure you get the most affordable loan.

Direct lenders

Direct lenders are operations that lend their own money. They don’t tend to have as lengthy underwriting process as a bank does, offering quick turnaround on approvals and funding. And direct lenders often have specialized knowledge in truck financing. On the other hand, some direct lenders charge higher rates and fees compared to traditional lenders.

When comparing direct lenders, consider the level of experience that lender has in providing semi-truck loans. Some have been offering loans to hundreds or thousands of truck owners, while others are new to the industry and may require research to vet its customer service and product offerings.

Bottom line

The best semi-truck loans can turn expensive equipment into an affordable solution for your business needs. Banks have a streamlined process with competitive rates, but you may also find a good offer from an online or direct lender if you don’t need a lot of in-person attention. Compare the pros and cons of each lender before you sign the loan agreement.

Frequently asked questions

• What credit score do you need to buy a semi truck?
  

  Most lenders require a credit score of at least 600. If your score is lower than that, you’ll want to seek out bad-credit semi-truck financing from a direct lender. Some lenders want to see a score in the high 600s to extend the best rates.

• What are equipment financing loan rates?
  

  Interest rates on an equipment financing loan start at about 6 percent to 8 percent from banks, but those rates are reserved for borrowers with excellent credit. Depending on your credit score and time in business, you may find rates as high as 35 percent, especially if you go with an online lender.

• Is equipment financing available for startups?
  

  Yes, some lenders offer loans to startups with six months, or even less time, in business. These lenders may also have lower revenue requirements.