Tractor Trailer Financing
Lenders normally approve loans based on the credit worthiness of the applicant. This means that they must run a credit check on the borrower and check a number of things including:
– Credit score of the company/individual
– Repayment history of the borrower (they check if the borrower delayed in making payments as well as whether they made full payments all through the repayment period. They also check if there are any bad loans)
– Loan amounts previously borrowed
– Number of loans previously borrowed
Companies/individuals with a high credit rating can expect to have their loan applications approved quickly. After all, they have proven themselves worthy, over time, to qualify for truck financing. The following are some tips on improving your credit rating:
– Make loan and credit card payments on time
– Check your credit report regularly and have any errors fixed
– Make sure each loan you’ve paid off is reflected on the credit report
– List your business with commercial credit bureaus
Lower the Risk You Pose
As mentioned earlier, the amount of money involved in buying a new truck is quite considerable, so lenders normally bear a lot of risk. That is why they often require additional information and take their time to process applications. As a business person, you can help to speed up the process by providing lenders with all the information they need to make a well-informed decision. This is easy since you only need to provide them with evidence that you are not a risky investment. In that regard, the following are some of the things you can do:
– Make a Large Downpayment: The easiest way to lower the risk you pose to your lender is to make a large downpayment, say 10-20% of the purchase price. For instance, if you have obtained a $150,000 quote for a semi truck, you should be prepared to make a downpayment of $15,000 to $20,000 on the truck. This shows that you are committed and prepared to buy the semi truck. As a result, the lender’s risk will reduce by 15-20%, and make it easier for them to approve the loan.
– Draw Up a Business Plan: If you do not already have a business plan, create one. Truck financing is a long term contract, so lenders want to know where you are headed. Therefore, you should draw up a business plan and submit it together with the loan application. This will significantly increase your chances of getting approved for the loan.
– Choose the Right Lender: Convincing a bank to help you buy a new truck may not be easy as they do not have a great understanding of the industry. Ideally, you should work with lenders that specialize in truck financing. These firms know how to properly quantify risk and can approve loans much faster. For more information, please call:
Capital Solutions, Inc.