If you’re an aspiring, a new, or newer trucking company, you might be wondering about the down payment requirement for semi truck loans. We operate as a broker, so we have many lenders and they all have a different appetite.
In addition, the business profiles we see differ greatly. There’s start up trucking companies. There are start ups with bad credit. And, of course, there are start-up trucking companies with average credit, great credit, etc.
Given those two facts, there is NOT a concrete, ever encompassing answer to the down payment requirement for a semi truck loan. Thus, we’ll talk about several of the options we have access to.
Down Payment Range
Also, as of this post (04/06/2023), the down payment range for a semi truck ranges from possibly 0% – 10% up to 15 – 40%. Given the market currently as rates have increased considerably over 2021 through now, many lender have had to tighten their guidelines and down payment requirement.
Frankly, new trucking companies, newer companies and those with small fleets that haven’t been in business for 5+ years won’t qualify for 0 – 10% down. Hence, they’re probably not reading this either. They were probably able to get financed at any dealer they choose.
We’re here to serve those who may NOT qualify for dealer financing. You know, companies that probably could just pay cash and may not NEED a semi truck loan. For example, start up trucking companies, Newer trucking companies in business for 2-4 years or less, or those that don’t have perfect credit. This sector will need to put 20 – 40% down (potentially just 15%).
Every applicant is different and there is no hard, fast guarantee on what your down payment will be, but we’ll cover a few likely scenarios based on a few basic qualifications beginning with the most challenged credit.
REALLY Bad Credit Down Payment Requirement for Semi Truck Loan
If your credit is really bad or non existent, you’ll probably need to put 40% down. If you’ve got enough cash saved to put down 40%, more power to you. However, if you don’t have 40% to put down, you can also potentially pledge secondary collateral. For example, if you have a free and clear piece of heavy equipment or a free and clear semi truck, you may be able to pledge that as secondary collateral. This would eliminate the need to use a large 40% down payment. You can even use real estate as secondary collateral. You just need to understand the implications.
For this semi truck loan option we can help even if the following apply:
- Recent bankruptcy (needs to be dismissed or discharged)
- The presence of Tax liens
- Judgements on record
- Slow pay accounts
- High revolving credit
- ANY credit score
- Start-Up trucking companies
- Owner / Operators
- Private party sales
For those business owners that have 40% down payment, we can get a semi truck loan for anybody.
First Time Owner Operator Financing Option 2
We’ve partnered with another funder (several actually) that’ll work with most of the following situations. Below there are some basic guidelines, BUT they look at every semi truck applicant on a case by case basis. The required semi truck loan down payment STARTS at 20% (maybe 15% in some cases). The required down payment along with the rate of interest will vary depending on all the variables of the person’s credit history, etc.. There are alot of items that determine a business owner’s creditworthiness, but here are a few; credit score, pay history, do you have like / similar credit?, any collections?, presence of BK, repo’s, judgements, tax liens, maxed credit cards? Are you a startup? Is your CDL new?
Often times we don’t know the down payment until the lenders see your complete application, credit profile, bank statements, and business profile. With that said, the down payment could be 20, 25, 30, or 35%. Some more qualified business owners could possibly get by with a 15% down payment.
Here’s the Basic Guidelines:
- Minimum 20% down
- Up to $74,000 funded
- 2015 or newer truck with <650,000 miles
- 1 day CDL is ok
- Up to 60 month term
- Non CDL investors OK
- Same Day approvals
- No Minimum FICO (but FICO can dictate tier and down payment amount for your semi)
- 1 day out of BK is ok
- No Tax returns
Semi Truck Down Payment Required for Established Companies & Good Credit | Option 3
Here’s another example from a lender that we work with that will allow lower down payments than 20-40%. As you can see by the credit tiers, it takes alot to get a down payment in the 0-15% range when buying a semi truck. For example (and this is what I eluded to earlier in the article), to be eligible for a 0-10% down payment on a semi truck, we’ll need a 700+ FICO, 5+ years in business, $20,000 in monthly cash flow, 10+ tradelines and 10+ years of credit, and of course no major derogatory items like collections, charges offs, etc.. Below, there is a chart that shows you your anticipated down payment based on your credit tier. Below that, there is a chart that outlines roughly what it takes to land in any given credit tier.