Trucking business loans

Which loans work best for trucking?

Commercial vehicle loans and equipment financing work best for buying trucks and trailers, because the truck is the collateral. Freight factoring works best for cash flow, because it turns a rate confirmation into cash in a day or two instead of waiting 30 to 60 days on a broker. Working capital loans fill the gaps: a transmission, tires, or an insurance renewal.

• Truck loans: 3 to 6 years, 5% to 25% down, typically 8% to 25% APR depending on credit and truck age.
• Freight factoring: advances of 90% to 97% of the invoice at 1% to 4% per invoice.
• Working capital: $10,000 to $150,000 over 6 to 24 months.

What do lenders like and dislike about trucking?

Lenders like trucking because the asset is movable, resellable and tracked. They like an authority more than two years old, a clean safety score, repeat shippers, and a fleet of three or more trucks. Factoring companies underwrite the shipper's credit, not yours, so loads for strong brokers and shippers are easy to fund.

They dislike new authorities under six months, trucks older than about ten years or past 600,000 to 700,000 miles, insurance lapses, and a prior repossession. Fuel costs and rate swings make one truck operations fragile, so a one truck fleet with a thin bank balance pays the highest rates in the industry.

How much can a trucking business borrow?

Truck lenders fund the purchase price, typically $25,000 to $200,000 for a tractor and $15,000 to $80,000 for a trailer, less a down payment of 10% to 25% for newer authorities. Factoring lines are sized to what you bill in a month, so a two truck operation billing $40,000 a month can usually access most of that as it is invoiced. Working capital lenders look at deposits and typically advance 50% to 100% of one month. Fleets under ten trucks usually borrow $50,000 to $500,000 in total, and established fleets can reach seven figures through asset based lending.

What documents will you be asked for?

Expect to be asked for your MC and DOT numbers, proof of insurance and the primary driver's CDL before anything else. Then, by product:

• Truck loans: the purchase agreement or dealer quote with year, make, model, mileage and VIN, plus 3 to 6 months of bank statements
• Factoring: an aging of open invoices, sample rate confirmations and bills of lading, and your list of brokers and shippers
• Working capital: bank statements and a voided check
• Banks and SBA: two years of tax returns, financial statements and a fleet list with values

Keep your ELD and safety records clean, because lenders check your public safety profile. See the document checklist.

What are the common uses of funds?

Trucking money usually goes to one of these.

• Adding a truck: a $90,000 used tractor financed over five years with 15% down.
• Covering slow pay: factoring $60,000 of open invoices so drivers are paid on Friday.
• A major repair: a $25,000 working capital loan for an engine rebuild so the truck earns again.
• Insurance for a new authority: a small loan or business credit card for the policy down payment.
• Growing from owner operator to a small fleet: a vehicle loan plus a factoring line, arranged together.

If cash is the problem rather than equipment, start with cash flow gaps.

What usually gets a trucking application declined?

The most common decline is a new authority: many truck lenders will not fund the first six to twelve months, and the ones that do want 25% down and a credit score above about 650. After that it is the equipment. Trucks that are too old or too high in mileage fail the lender's collateral rules no matter how good the borrower is. Other frequent reasons are an insurance lapse, a conditional or unsatisfactory safety rating, a prior repossession, and statements that cannot cover a payment. Factoring declines happen when your shippers have weak credit or another lender already holds a UCC lien on your receivables.

How to apply

Apply once here with your authority details, bank statements and the truck or invoices you want to finance, and it reaches truck lenders, factoring companies and working capital lenders together. You can also ask your AI assistant to apply for you through our MCP server, described in the agents hub: it can read your statements and rate confirmations, fill the forms and submit. It is free to the business and offers come back to the same place.