Dump trucks are significant equipment for many businesses, such as construction, transportation, and other commercial industries. Whether you are a business owner with a running setup or you’re thinking about a start-up and you need a dump truck for your business, you’ll have to decide whether you should purchase, lease, or rent a dump truck. Purchasing an expensive commercial vehicle like a dump truck right away is not at all a good decision from financial aspects if you want to keep the cash flow of your tenure steady. This is where truck financing helps. This article will guide you about how you can own a dump truck without having to spend thousands of dollars in one go.
What Is Truck Financing?
One of the most popular ways used to own a dump truck is using Truck financing services. There are a number of companies that you can avail loans from for the investment required. In this way, you make an agreement to pay the loan back in small monthly payments and that you get the ownership of the truck. The vehicle itself becomes collateral, meaning if you are unable to pay the loan back according to the agreement, the company repossesses the vehicle. This way is more suitable than others because it involves less interest rate. Not just this, the monthly payments are also much affordable and flexible. Even if your credit score is not ideal, this option is easier to access than other ways.
What Makes You Eligible For Dump Truck Financing?
Normally, financing companies make a few checks on you to make sure your business history is clean regarding bankruptcy and tax liens. However, before you apply for the dump truck financing process, there are some items you’ll require for approval. So it’s necessary to have adequate knowledge about them so you don’t scramble when lenders request them. Some of the things most lenders require include:
- Credit application:
This is needed to start the process of getting a pre-approval from a Bank or Lender. This gives them the permission to pull your credit profile to make a preliminary decision as to your Truck Financing Approval.
- Business profile:
A brief Business profile is needed for the finance company that’s assisting you so that they can get a clear understanding of where your business currently stands and how this new purchase will help your business. Once your relationship manager compiles this Profile they will attach it along with your credit application and other items that the bank or lender will need to get you approved for your Equipment Financing.
- Information about the vehicle:
They’ll ask you for information about the vehicle you desire to get finance like its year, model, manufacturing details, price, etc. This information is ideal to be given in the form of a Vendor Invoice and Spec Sheet.
- Current bank statements:
Your bank statements tell about your financial condition and also tell how well your business has been doing. Lenders require 3 months’ bank statements to make sure your business is performing well enough so you won’t default in paying back the loan.
- Your experience in the business:
Your experience in the business tells a lot about your eligibility for the loan. If you have 2 or more years in the business, it makes you an ideal borrower. But there’s nothing to worry about even if you haven’t been in the business for 2 years, as there are other options that can help you get your business going.
One of the things you should review before applying is your business credit report. The credit score tells about your creditworthiness. Ideally, your credit score should be 700 to access Truck financing.
What Are The Benefits of Dump Truck Financing?
Even if you can afford to purchase a dump truck, it’s not very wise to spend such a big amount right away considering the steadiness of your cash flow and working capital. Therefore, truck financing allows you to expand or startup your business without having to worry about all this. Here is why you should choose truck financing:
1) Flexible repayment:
The repayment options are easy and flexible, making it easier for you to pay for your truck.
2) Quick processing:
The processing time can be as quick as 4 hours but as long as 24 hours.
3) Low-interest rates:
Clients with an established time in the business with a great personal credit score and established commercial credit score can be rewarded with lower interest rates from 4%-9%.
It takes years to establish a stable trucking business or save the capital required to start it up but with financing, you can achieve all this in a short window of time. Therefore, instead of spending thousands of dollars, finance a dump truck and get your business moving fast within no time.