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How to finance a trucking business

Are you interested in starting your own trucking business? While it may seem like a lucrative venture, it’s important to understand the financial aspects before taking the leap.

In this comprehensive guide, we’ll cover:

  • The upfront costs of starting a trucking business
  • Business loans for trucking companies
  • Owner-operator startup loans
  • Tips for evaluating leasing versus buying equipment

We’ll also provide insights on how to determine the best funding solutions for your needs, including factors like interest rates, repayment terms and credit history. Whether you’re a prospective truck driver or a current owner-operator looking to expand your fleet, this guide has all the information you need to successfully finance your trucking business.

And when you’re finished reading, check out the other articles in our ‘How to become an owner-operator’ series:

Upfront costs for starting a trucking business

Starting a trucking business involves several upfront costs, including the following:

  • Purchase or lease of a truck or multiple trucks
  • Insurance (liability, auto, cargo, etc.)
  • Registration, licensing, and permit fees
  • Fuel and maintenance costs
  • Hiring drivers and staff (if necessary)
  • Office rent and utilities
  • Accounting and legal fees
  • Technology expenses (GPS tracking, communication devices, etc.)
  • Marketing and advertising expenses
  • Miscellaneous expenses (office supplies, uniforms, etc.)

The cost of how to start a trucking business can vary depending on the size and scope of the operation.

Insurance costs

When asking “how much does it cost to start a trucking company,” don’t forget the initial upfront trucking company startup costs.

The amount of upfront insurance costs may vary from one insurance provider to another, and may depend on several factors. Example considerations include the type of policy, level of coverage, and policyholder’s risk profile.

The four most common types of insurance are:

  1. Liability insurance: This insurance covers damage or injury caused by the trucker while driving. The cost of liability insurance for a new trucking business varies between $5,000 to $10,000 per truck per year.
  2. Cargo insurance: This insurance covers the value of the goods being transported and the liability arising from their loss or damage. The cost of cargo insurance varies depending on the type of goods being transported. For example, hazardous materials have higher insurance premiums than non-hazardous materials.
  3. Physical damage insurance: This insurance covers the cost of repairs or truck replacement in case of an accident or theft. The cost for physical damage insurance varies between $2,000 to $8,000 per truck per year.
  4. Workers’ compensation insurance: This insurance covers the medical expenses and lost wages of drivers or employees who sustain injuries while on the job. Workers’ compensation insurance costs vary depending on the state and number of employees.  

The upfront insurance costs for small business trucking can range from $10,000 to $25,000 for a single truck. However, the actual cost depends on several factors, such as location, type of cargo hauled, and number of trucks in the fleet.

Permit costs

Permits for a new trucking business are important trucking business expenses to consider. It varies depending on the location, type of permits required, and business size. Generally, costs can range from a few hundred dollars to thousands of dollars.

Some of the permits that new trucking companies may need include the:

  • Motor Carrier Operating Authority – This permit is required for all interstate carriers and allows the trucking company to operate legally within the U.S.
  • International Registration Plan (IRP) – This permit is required for any trucking company that operates across U.S. state and Canadian province lines and needs to register vehicles in multiple jurisdictions. 
  • International Fuel Tax Agreement (IFTA) – This permit is required for any trucking company that operates across U.S. state and Canadian province lines and needs to track and pay fuel taxes in multiple jurisdictions. 
  • Unified Carrier Registration (UCR) – This permit is required for any trucking company that operates across state lines and has a gross vehicle weight rating of more than 10,001 pounds.

Other permits and licenses may also be required, such as state and local business licenses and permits for hazardous materials transportation.

Average cost of equipment for a new trucking business

Starting a trucking company costs include equipment expenses. The cost of equipment for a new trucking business can vary greatly depending on the business size, equipment needed, and whether the business is buying new or used equipment. However, some estimated costs for common equipment include:

  • A new tractor-trailer unit: $120,000 to $150,000
  • Used tractor-trailer unit: $70,000 to $100,000
  • New flatbed trailer: $20,000 to $30,000
  • Used flatbed trailer: $10,000 to $20,000
  • New refrigerated trailer: $50,000 to $80,000
  • Used refrigerated trailer: $20,000 to $40,000
  • New cargo van: $25,000 to $40,000
  • Used cargo van: $10,000 to $20,000   

It’s important to note that these costs don’t include maintenance, fuel, licensing fees or insurance. It is important to find the best commercial truck financing for you. 

6 financing options available for a trucking business

What options are there to get commercial truck financing? There are six popular types of financing options available for truck drivers. These include:

  1. Truck driver loans: These trucking company loans are designed specifically for truck drivers and owner-operators. This type of funding for trucking businesses can help cover expenses like truck repairs, maintenance and upgrades, and personal expenses like medical bills or home repairs. Truck driver loans usually have flexible terms and high approval rates.
  2. Small business loans: Small business loans can help provide the funding needed to start or grow a business. There are different types of small business owner-operator startup loans, including secured and unsecured loans. They can also be used to cover a variety of expenses like equipment, inventory and payroll.
  3. Equipment financing: New equipment and used commercial truck financing can help secure funding for necessary equipment purchases, such as trucks, trailers and other equipment needed for a trucking business. These loans usually require collateral and have set repayment terms.
  4. Lines of credit: Lines of credit from commercial truck financing companies are typically used for short-term financing needs or to cover unexpected expenses. They provide access to funds up to a predetermined credit limit, and interest is only charged on the amount of credit used.
  5. SBA loan for semitrucks: The Small Business Administration offers SBA trucking loans to small business owners, which can go toward a variety of expenses. These loans typically have lower interest rates and longer repayment terms.
  6. Factoring: Factoring is a type of financing where a business sells its unpaid invoices to a factoring company for a percentage of the total value. This can provide the funds needed to cover immediate expenses.  

It’s important to research and compare different options to find the startup trucking business loans that best fit your needs and financial situation.

Pros and cons of leasing vs buying equipment

Leasing equipment


  • Lower initial cost
  • More flexibility
  • Lower maintenance costs


  • No ownership
  • Higher overall cost
  • More restrictions 

Buying equipment


  • Ownership
  • Lower overall cost
  • No restrictions 


  • Higher initial cost
  • More responsibility
  • Limited flexibility

Tips for identifying the best funding solution

Consider your credit history

Before looking for funding solutions, it’s important to know your credit score and credit history. This will help determine which funding options are available, and at what interest rate. 

Research interest rates

When looking for small business loans for truckers, compare interest rates from various lenders. The lower the commercial truck financing rates, the less you’ll have to pay back in the long run.  Read How does truck financing work? to be as informed as possible. 

Look for flexible repayment terms

Repayment terms differ from one funding solution to the next. Look for repayment terms that suit your budget and provide flexibility in case of emergencies or financial changes.

Consider the amount you need

Knowing how much money you need will help filter out funding options that don’t meet your requirements. Be realistic, and don’t unnecessarily borrow a huge amount that you’ll struggle to repay.

Review the terms and conditions

Before accepting any funding offer, read the terms and conditions thoroughly. Understand the fees and charges associated with the funding solution.

Consider the repayment frequency

Depending on the solution, financing can be repaid annually, semi-annually, monthly or even weekly. Look for options that align with your income and expense, so you don’t miss payments and incur penalties.

Find trucking business financing solutions that fit your needs

Determining the best funding solutions requires thorough research, knowing your credit history, and due diligence into interest rates. Consider the repayment terms of transportation business loans, and carefully review the terms and conditions before accepting any offer.

Read more in our “How to become an owner-operator” series


How much money should you have before becoming an owner-operator?

The amount required to become an owner-operator can vary depending on the type of equipment needed, business model and location. However, some industry experts recommend having at least $10,000 to $15,000 in savings to cover initial startup costs and operating expenses.

Is being a truck owner-operator worth it?

The answer depends on individual goals, financials and work preferences. On one hand it can be financially rewarding and provide a greater degree of control over one’s work. On the other hand, it also can entail significant upfront costs, maintenance expenses, a variable income, and increased responsibilities compared to driving for a company. It’s best to thoroughly research all aspects of being an owner-operator before making a decision. 

Can you start a truck business with one truck?

Yes, you can indeed start a trucking business with just one truck. However, keep in mind that success will depend on effective management, securing reliable clients, handling maintenance and operational costs, and eventually expanding your fleet for greater profitability.

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