Looking to get a new part for your truck? Depending on the part, it can cost thousands of dollars to get the necessary equipment. Trucking equipment financing companies make these purchases more manageable through loan payment plans. However, you don’t want to get stuck with an unfair deal. If you are looking for a short-term fix or long-term financing partner, start with these top picks.
Quicklook: Best trucking equipment financing companies
- Best for a high loan amount: TAB Bank
- Best for no hard credit inquiries: Top Mark Funding
- Best for financing options: Truck Lenders USA
- Best for small businesses: Balboa Capital
- Best for borrowers with no credit: CAG Truck Capital
- Best for zero money down: First Capital Business Finance
6 best trucking equipment financing options
Equipment financing makes it easier for truckers and companies to get the parts they’re looking for. These options can help you get the capital you need to pay for them.
TAB Bank
The Transportation Alliance Bank, also known as the TAB Bank, opened its doors in 1998 and is a member of the FDIC. The bank serves many business owners but its roots are in serving over-the-road truckers and others in the transportation industry. TAB Bank is an online bank that has competitive interest rates for businesses that store money in TAB Bank accounts. The company offers straightforward terms after you submit an application.
Best for: High loan amount
Max funding amount: $300,000
Same-day funding: No; you get a same-day credit decision paired with quick funding. There is no mention of same-day funding.
Collateral requirements: Yes. The equipment becomes the collateral.
Credit score requirements: The company caters to borrowers with high and low credit scores.
Repayment terms: Flexible terms
Annual revenue requirement: Unspecified
Special features:
- Quick funding
- Flexible terms
- Direct financing
Benefits:
- Competitive rates
- Straightforward terms once you submit an application
- Customizable solutions for your needs
Disadvantages:
- Not much info on credit score or revenue requirements beyond acceptance of borrowers with high and low credit scores
- No mention of same-day funding (there is mention of quick funding)
Top Mark Funding
Top Mark Funding has been around for over 20 years. The company provides financing and leasing options if you want to get a new truck. Drivers and companies seeking equipment can also obtain capital from the established lender.
Best for: No hard credit inquiries
Max funding amount: $250,000
Same-day funding: Yes
Collateral requirements: Yes. The equipment becomes the collateral.
Credit score requirements: 650 or higher
Repayment terms: Flexible terms
Annual revenue requirement: Not specified
Special features:
- Can choose between taking out a loan or leasing a truck if you want more than equipment
- Best rates and fast funding
- Same day pre-approval
Benefits:
- Receive up to $250k within 24 hours
- No hard credit inquiries
- Competitive rates
Disadvantages:
- Some issues with refunds in the reviews
- Multiple upfront payments are required in some cases
Truck Lenders USA
Truck Lenders USA is a leader in the industry that has helped truckers and fleet owners for over 30 years. The company offers equipment financing, truck financing and leasing. You can find a suite of financial products by exploring Truck Lenders USA’s website.
Best for: Financing options
Max funding amount: Unspecified
Same-day funding: No
Collateral requirements: Yes. The equipment becomes the collateral.
Credit score requirements: 675
Repayment terms: Flexible terms
Annual revenue requirement: Unspecified
Special features:
- Options to finance or lease trucks in addition to equipment financing
- Forms Library with important documents and rubrics
- No financial documents required for most lending programs
Benefits:
- Many financing options
- Work with a leader in the industry
- Award-winning customer service
Disadvantages:
- Borrowers need at least two years of business experience
- Higher credit score requirement than most lenders (675 credit score)
Balboa Capital
Balboa Capital lets businesses borrow up to $250,000 to cover expansion, equipment and other investments. The lender has an A+ rating on the Better Business Bureau. Balboa Capital has same-day funding available and flexible loan terms for their financial products.
Best for: Small businesses
Max funding amount: $250,000
Same-day funding: Yes
Collateral requirements: No
Credit score requirements: 620
Repayment terms: 3-24 months for a short-term business loan
Annual revenue requirement: $300,000
Special features:
- Same-day funding
- One-hour approval decisions during business hours
- Flexible terms
- Competitive rates
Benefits:
- Low credit score requirement
- Borrow up to $250,000
- Simple and quick process
Disadvantages:
- High annual revenue requirement
- At least one year in business
CAG Truck Capital
You don’t need any credit history to get financing from CAG Truck Capital. It uses its own capital to fund truckers instead of acting as a broker. The lender has a simple application process with same-day approval.
Best for: Borrowers with no credit
Max funding amount: Unspecified
Same-day funding: No mention of same-day funding, which is different from same-day approval
Collateral requirements: Yes. The equipment becomes the collateral.
Credit score requirements: You do not need credit history to get a loan.
Repayment terms: Flexible terms
Annual revenue requirement: Unspecified
Special features:
- Cash upfront instead of paying fees before receiving cash
- Loans for any credit score range
- Simple and quick application
Benefits:
- No hard credit inquiry
- Financing for long hood trucks that are 2000 models or younger – greater range than most lenders
- Financing available for borrowers regardless of credit score
Disadvantages:
- High down payment requirement if you do not have the best credit (35%)
- Not the best fit for startups because of higher interest rate and down payment requirement
First Capital Business Finance
First Capital Business Finance is a commercial lender that can help truckers and fleet owners seeking trucks and equipment. The company offers equipment financing for several types of equipment and lets borrowers skip the down payment if they have high enough credit scores. If you do not have the best credit score, you can still get a loan from First Capital Business Finance.
Best for: Zero money down
Max funding amount: $150,000
Same-day funding: No. Same-day approval is included.
Collateral requirements: Yes. The equipment becomes the collateral.
Credit score requirements: 540
Repayment terms: Flexible terms
Annual revenue requirement: Unspecified
Special features:
- Same-day approval
- Financing for startups
- Several types of equipment financing
Benefits:
- Zero down payment options
- Loans available for low-credit borrowers
- Upfront about down payment options and requirements (i.e., credit score, years of experience, etc.)
Disadvantages:
- Higher interest rates if you have low credit or make a lower down payment
- Different guidelines for startups for moderate down payment option
How does truck equipment financing work?
Not every trucker or company has enough cash saved up to buy equipment outright. You don’t want to get stuck with leases and sometimes leasing isn’t an option. For instance, you can’t lease a transmitter for your truck. You will have to pay the full price to buy equipment, and financing covers any gaps.
Some funds in your bank account can toward the down payment and you can borrow the remaining money from a lender. You will have to make monthly payments spaced over multiple years based on the term’s length. Each monthly payment will include interest, a figure that represents the lender’s return on investment. Lenders incur risks with every loan, and interest helps them justify that risk.
What are typical equipment financing terms?
Truck equipment financing providers have different terms and rates based on your credit score and other factors. A higher credit score and lower debt service coverage ratio help borrowers access lower interest rates and higher loan amounts. Most trucking equipment loans are one to five years long and have interest rates between 5% and 30%.
Tips for choosing trucking equipment financing options
If you’re looking for financing for the first time, browsing through the choices can feel overwhelming. Truckers and companies with more experience can still benefit from learning a few tips to save money when borrowing money. These pointers may improve your chances of finding a lending partner for your equipment needs.
- Look at credit score requirements: You should not apply for financing if you do not fulfill the credit score requirement. You will likely get rejected, and the hard credit inquiry will stay on your credit history. Hard credit inquiries reduce your credit score by a few points. Most lenders initiate hard credit checks when you apply for a loan.
- Check the interest rates: You can save thousands of dollars on your loan by picking a lower interest rate. Shopping around can help you find better deals. If you prequalify with a soft credit pull, it won’t impact your credit score.
- Assess the urgency: Borrowers who need equipment quickly may have to shortlist their search to lenders who can provide same-day funding. If you can wait a few weeks, you will have more options and might secure a lower interest rate.
- Don’t be afraid to branch out: You shouldn’t blindly do business with the same lender each time. It’s a good idea to shop around and look at competing offers to see if you can secure more favorable terms somewhere else.
- Review your cash flow and the terms: Truckers and companies that are tight on cash flow may want to add more years to the loan’s term. A five-year loan has lower monthly payments than a one-year loan. However, you may want to take the opposite approach if your main goal is getting the debt off your balance sheet sooner. Check with the lender to see if they support loan terms varying from one to five years. Some lenders may offer terms with additional years.
Financing your equipment purchase
You don’t want to get stuck with leasing, and you will have to commit to a purchase for some types of equipment. When cash is tight or you want to use your capital for other investments, truck equipment financing companies can become useful resources for your business. Getting enough capital at favorable terms makes it easier to acquire the assets you need for your truck.
FAQ
The best choice depends on what you want. You may get better terms with a bank or credit union, but approval times are much longer. Online lenders and dealerships can offer quicker financing, competitive rates and longer terms.
Lenders have different requirements, but you typically need a 650 credit score to purchase a commercial truck. A higher down payment can help you qualify with a lower score. A higher score entitles you to a lower interest rate.
A good interest rate depends on your credit score and the semi truck’s condition. Most borrowers get an interest rate between 5% and 30% for a semitruck.
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