The sudden breakdown of semi-trucks is a significant problem many truck drivers face daily. The unplanned occurrence of costly damages sometimes puts commercial truck drivers on the verge of accruing gross loss in their businesses. And a lot of them lack enough funds to repair these trucks when they break down.
If you’re a semi-truck driver who’s searching for possible ways to finance the repair of your damaged semi-trucks, you’re in the right place. This beginner’s guide will help you. So, read on to learn more!
Getting the Basic Requirements to Finance Your Semi-Truck Repair
As a truck owner, to qualify for a loan from semi-truck repair financing companies, there are some requirements you must have. They include:
1. Commercial Driver’s License (CDL)
To stand a chance of being financed by a semi-truck repair financing company, you need to have a commercial driver’s license. This offers the financing company some assurance that you’d be able to repay your “loan” since the truck is obviously for business.
2. Original Truck Documents/Papers
Before you approach any lending company to finance the repair of your truck, you need to provide your semi-truck documents/license.
Examples of such documents/papers include your insurance paperwork, IFTA certificate, MCS-90 form, Emissions certificate, and more!
3. Your Banking History/Statement of Account
Getting the statement of your private or business account is essential. Your lender may need to know your monthly revenue and average income. This enables the company to determine what amount they can safely offer you to finance your truck repair.
4. Credit Score
The credit score is pretty important. It’s a key determinant for approving any loan at most financial institutions. Your credit score is a number derived from your credit history, usually within the range of 300-850, which tells a potential lender your worthiness to receive a loan.
Hence, you have to ensure a good credit score before approaching any semi-truck financing company for help!
5. Business Registration Documents & Tax Returns Record
Documents that confirm your business is registered and that you’ve been faithfully paying your business tax can help you get funding to repair your semi-truck. So, dust your business registration certificate and ensure you’re “on good terms” with the IRS before heading to the semi-truck financing company.
In addition, it’s good to note that these requirements may vary for each company. However, these are fundamental requirements that every semi-truck repair financing company will demand if you want quick loan approval.
Other Factors That Can Help Facilitate Your Semi-truck Repair Financing
Having all the above requirements can guarantee your loan approval. However, other factors can be used to determine your eligibility for a semi-truck repair loan as a beginner. So, let’s have a look.
- Provision of 5% Down Payment: As a commercial truck owner looking for a repair loan, you can stand a chance of being considered by a loan provider if you can produce a minimum of 5% of the amount you need for your truck repair.
- The Age of Your Truck: Many truck repair lenders will finance your truck repair if its age is less than 10 years. So, the older your semi-truck, the lesser the chances of getting hassle-free funding for repair.
- Your Truck’s Mileage: Your vehicle will get faster repair financing if you can prove that it travels less than 700,000 miles over a specific period. The lesser your truck travels, the higher your chance of getting a repair loan.
In addition to the above factors, you may need to provide photos of the truck, your mobile number, and your home address.
Searching for the Ideal Semi-Truck Repair Financing Company for You
After gathering the necessary documents and meeting all the loan requirements, the next step is to get a suitable financing company for your loan.
There are four options you can explore, and they’re listed below:
- Equipment Leasing Companies
- Small Business Term Loan Lenders
- Factoring Companies
- Working Capital Loan Lenders
Now, let’s consider the nitty-gritty of each of them!
Equipment Leasing Companies
These are companies that demand collateral before financing the repair of your truck. As a commercial truck driver, you may have to use your truck or any other valuable equipment as collateral to get a loan.
In addition, the status of your credit score will determine the amount of money you’re eligible to get from these companies.
While applying for a loan from an equipment leasing company, your collateral value has to be equivalent to the amount you need to finance the repair of your truck. Also, there’s no visible benefit to enjoy if you make a payback earlier than agreed.
Small Business Term Loan Lenders
As a new commercial truck driver or owner who just got a truck breakdown, applying for a small business term loan can be a perfect option for you.
With a convenient payback plan, you’ll get to borrow twice the amount of your monthly revenue to repair your truck. The payback duration in small business term loans can range up to 10 years.
In addition, the period agreed for your loan payment is mainly determined by the status of your credit score.
A factoring company is another place you can quickly get finance from to repair your truck. All you have to do is sell off your unpaid invoices to the company, and the money you need for your truck repair will be approved.
So, you get your owed money from someone else (the factoring company) to repair your truck. Of course, you’ll lose some percentage to the factoring company, but it’s worth doing to get your semi-truck on the road ASAP!
To use any factoring company’s semi-truck repair financing programs, you must create a trusting relationship with the company.
Working Capital Loan Lenders
Approaching Working Capital lenders can also be a good option for your truck repair. You get to receive the loan for repairing your truck within 24 hours after your application. What makes working capital loan providers different is their daily repayment plan.
An agreed return amount will be deducted from your account every working day for 6 months or a year. Unfortunately, this could be a pain in the neck for a small business owner as such a repayment plan can significantly affect business.
Some Examples of Semi-Truck Repair Financing Companies
Below are some examples of semi-truck repair financing companies that you can use and their features:
Clear Path is a leading semi-truck financing company that doesn’t use the status of your credit score to determine your chance of getting the needed loan to repair your big rig. Instead, the company uses other criteria to judge if a truck owner will qualify for a loan.
Criteria for Getting a Loan
Below are Clear Path’s criteria for getting a loan:
- Clear & Free Title of the Truck: To qualify for the Clear Path financing program, a truck driver or owner must have a clear and free title of the truck. So, the company must be able to confirm you’re the actual owner of the truck and that there’s no other party claiming it.
- Value of Your Truck: For Clear Path, the market value of your truck is pretty significant as it determines the amount of money the company can loan you. Trucks in high demand or good shape can serve as your collateral to get a loan from Clear Path.
Benefits of Using Clear Path Financing Program
There are enormous benefits you can enjoy by patronizing this financing company. Some of which are:
- No Payment of Upfront: Getting the loan you need to repair your truck from Clear Path comes at ease. You don’t have to pay any upfront while applying for the loan.
- High Consideration for Older Trucks: Clear Path finances the repair of both old and new trucks. So, even if your truck is old, you still stand a good chance of getting repair loan money.
- Fast Approval of Loans: Getting approval of your loan request is swift and effective.
- Suitable Payback Plan: Clear Path provides semi-truck drivers with a suitable payback plan that comes with convenience. You get to pay back your loan using a monthly plan which can run for 24-36 months.
Capital Solutions is a distinguished truck repair loan lender specializing in loaning truck drivers money for engine overhauls. It also advises and guides engine overhauls via its on-staff truck experts and technicians.
If the loan you’re looking for is to overhaul your truck engine, then Capital Solutions should be your turn-to company for financing.
Benefits of Using Capital Solutions
Some of the benefits you enjoy patronizing Capital Solutions are:
- Quick Approval of a Loan: As a leading semi-truck repair financing company, Capital Solutions has mastered the art of approving loans quickly.
- Advice From Truck Experts and Diesel Technicians: By lending money from Capital Solutions for engine overhaul or the repair of your truck, you stand a chance of meeting truck expertise who can guide and help you get your vehicle running again in no time!
Frequently Asked Questions
How Much Does It Cost to Repair a Semi-Truck?
You may need roughly about $10,000 – $20,000 to fix damages or faults on one semi-truck. This amount is primarily valid when you’re always on the road and use your semi-truck for heavy-duty commercial purposes.
How Long Does a Semi-truck Engine Last?
On average, a semi-truck engine is expected to run for about 720,000 miles. But thanks to technology, some semi-trucks now have larger engines that can go a million miles and more!
What’s the Average Interest Rate on a Semi-Truck?
Most lenders charge a 5 – 30% interest rate annually for semi-truck loans. The interest rate they offer you depends on some factors such as the condition and type of truck, your credit score, and more!
As a semi-truck owner or driver, you’re bound to encounter breakdowns or situations that require emergency repairs to your vehicle. But sometimes, having enough funds to facilitate these repairs may pose a problem.
Therefore, there are a lot of semi-truck repair financing companies out there that you can approach for a loan to finance your semi-truck. All you need to do is observe the requirements of these companies and find out if their financing services are ideal for you.
If, after close observation, you feel the company is the best option for you, go for it!