According to the United States Small Business Administration, the number of small businesses in this country has grown to more than 28.8 million. However, most of these businesses have failed to reach their ceilings and be considered as large businesses because they don’t have enough funds to buy heavy production and supply equipment such as heavy trucks. Others have been stuck with heavy debts, making it hard to access heavy duty truck loans.
Acquiring a truck is one of the most strategic asset investments that could lead a small business to the next level of growth. Transportation of raw materials to the factory and distribution of finished goods will be made easier. However, first time semi truck financing is always a complex undertaking that needs exhaustive analysis to avoid mistakes. Here are some of the common first time semi truck financing small businesses can consider.
Financial Status of the Business
First time semi truck financing is an expensive undertaking not only to the small businesses but to the established organizations as well. Therefore, a deep analysis of the financial status of the business must be done to ascertain how well the business is operating. Most of the small businesses operate on the edge; they have more debts than the cash they are generating.
If a small business has more debts, truck financing could become a major handle. However, a company that has sufficient cash in its reserve can easily fund a truck acquisition. First time semi truck financing can be achieved with the large cash at a bank without considering truck loans, which are offered by lending companies.
Buying or Leasing
As a small business owner who is interested in the acquisition of a truck, you have to analyze whether buying or leasing will work for your company. Buying a truck is one of the easiest and most straightforward processes that you can undertake. However, buying is only possible if you have sufficient funds to cater for first time semi truck financing.
Leasing is an owner operator truck financing strategy that involves getting a truck and paying lease amount throughout the lease period. It is a simple asset acquisition strategy because it enables small businesses to access assets they could not be able to access. However, leasing is only possible if a company can pay monthly lease amounts.
Small Business Truck Loans
Another simple and strategic method of acquiring a truck is through small business truck loans. There are hundreds of companies offering loans to small businesses for first time semi truck financing. Semi truck financing companies have formulated rules and regulations that govern these types of loans.
Small business loans for truckers don’t carry the same rules and regulations that govern other forms of loans. These loans have been specifically created to assist small businesses to acquire trucks. The money offered as a loan cannot be used for any other purpose other than acquiring a semi truck. Revenue generated by the semi truck is used in the loan repayment process.
Bad Credit Scenario
First time semi truck financing is hindered by the fact that most of the small businesses are operating with bad credit tags. When a small business faces bad credit conundrum, it becomes very hard to access small business loans from mainstream lenders such as banks.
However, some semi truck financing companies are willing to offer small business loans for trucks, even with bad credit. Commercial truck financing bad credit has become a common aspect around the country which has given breathing space to the small businesses. Getting financing with bad credit has also been made easier such that most of the companies can access loans without limitations.
As a small business owner, you are always struggling to fund the operations of your business. Shortage of finances to run the company seems to be the greatest challenge your business is experiencing. However, financing a semi truck through loans will help your business to move to the next level.