One of the challenges a new logistics or trucking company can have is getting first time owner operator financing. After all, the banks are looking for perfect credit, 2-5 years in business, etc. before they will issue loans to businesses. Also, since the collateral is always changing locations, it can be hard for a bank to repossess the equipment if they need to. Therefore, new owner operators can have a hard time getting financing. Here at the The Broker, we have relationships with many lenders. Hence, we have several options for owner operator startup loans.
If you have perfect credit and alot of money in the bank, you may be able to get financing right at the dealer. While we have plenty of options for the perfect scenario, we love helping those not so perfect candidates get owner operator startup loans to purchase a commercial vehicle.
With that said, running a business is hard work. However, that hard work can pay dividends if you play your cards right.
Below we’ll talk about a few ways to get your first time owner operator truck financing. We’ll also provide some sample transactions from some or our lenders or that we have funded.
Owner Operator StartUp Loans Options 1
This would be sort of a last resort. The nice thing about it is this, we can get virtually anyone first time owner operator truck financing with this option.
For this truck driver financing 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
If you have a 40% down payment, we can get owner operator startup loans for anybody.
Secondly, if you have secondary collateral to pledge, we can finance any credit scenario including owner operator startups. Secondary collateral could be another commercial vehicle, heavy equipment, yellow iron, and potentially even real estate you might own if there is enough equity.
All of these options require a hefty amount of skin in the game from the new business owner. Also, it’s important to know that you’re not going to get the lowest of interest rates. Hence, you need to have a solid business plan and hopefully a means of getting on the road ASAP and making some money.
Depending on all the particulars, you may even be able to get financing from this particular lender with less down (like 25, 30, or possibly 35% down).
First Time Owner Operator Financing Option 2
We have another lender (several rather) that will work with all the following scenarios. What you see below are their basic guidelines. However, they look at every deal individually. The down payment requirement STARTS at 20%. The down payment required as well as the interest rate will depend on all the particulars of the applicant’s credit worthiness. Many things determine ones 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?
Aforementioned basic guidelines:
- Minimum 20% down
- Up to $74,000 funded (sometimes more)
- 2015 or newer truck with <650,000 miles
- 1 day CDL ok
- Up to 60 month term
- Non CDL investors OK
- Same Day approvals
- No Minimum FICO
- 1 day out of BK ok
- No Tax returns
Sample Approved First Time Owner Operator Financing (from Option 2 Lender)
- $58,950 Kenworth T-800
- Down Payment of 30.5% or $18,000
- 4 year term
- Low to mid 640 FICO
- Not a Lease, was an EFA (Equipment Finance Agreement)
The Challenge; while the customer’s credit scores were not the lowest ever, he did have 3-5 late payments on revolving credit. Because of this, prime type lenders had denied his finance request. We were able to arrange an approval within about 24 hours.
As we’ve discussed, we function as a broker, so we have many options with multiple lenders. We’d love to help you financing your startup trucking company.