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Two truck wrecker service

Can I Get Tow Truck Financing with Bad Credit?

Alternative Small Business Funding

When it comes to tow truck companies, they’re very much a service that some people love, and some people hate. While they’re applauded for helping those in need, those who have their vehicles removed from a location won’t have very nice things to say about the driver. Yet, it’s a necessary service. Although drivers will resent having their vehicle taken, they have a responsibility to park safely and follow the rules of the road.

Whatever people think of the tow truck service, tow truck drivers in this niche provide an important service. As a result, you don’t need us to tell you that the industry is incredibly competitive. Whether your business is large or small, you face constant competition for customers and contracts. In an era of social media, even new businesses can generate enough traction to make them a threat.

The good news for tow truck companies is that the industry is also growing - therefore, there’s room for your tow truck business to enjoy success. So long as you provide a professional service, there’s no reason why you can’t build credibility and authority in the market.

Today, we want to help readers who need tow truck financing. Whether you want to hire new staff or invest in new equipment, you’ll find solutions. Fortunately, the South Florida Funding Group has extensive experience in this field and even has solutions for those with bad credit seeking alternative funding.

Why Seek Financing?

First things first, why would you seek financing in the first place? Ultimately, you can find financing solutions to sort any need. Therefore, it’s best to contact the South Florida Funding Group as soon as possible. This being said, here are some examples of where you might want to invest:

Meet Industry Regulations

Every year, it seems the relevant body changes the requirements and regulations that govern the tow truck niche. For example, two truck companies need the right certifications while also meeting government standards. As a highly regulated, technical industry, you need to ensure that all staff members have the right training and that all equipment is maintained to industry standards.

Invest in Staff

In this niche, perhaps more than others, success is dependent on recurring business and staff retention. If you can keep customers and staff happy, this is half the battle won already. One way that you can achieve both goals is by investing in staff. By providing training and better career opportunities, your team members are motivated to stick with the business because you’ve shown belief in them. In turn, they’re motivated to provide the best service possible to all customers because they won’t want to let you down.

With investment in staff, your employees are happier, customers are happier, and you offer more value compared to other services in the niche. The business becomes a family whereby all employees work hard for each other.

Equipment and Technology

Just like every other industry in the world, the tow truck hasn’t escaped the clutches of modern technology. You might want alternative financing so that you can invest in new technology - this could be route-planning tools, booking software, or another form of technology.

In terms of equipment, the most obvious suggestions are vehicles and facilities. Yet, you could also want funds to spend on computers, phone systems, printers, office machinery, or another type of equipment.


If anyone wants to enter the tow truck industry, the need for insurance is simply unavoidable. Here are just some of the policies that you’re likely to need:

  • General
  • Liability
  • Health
  • Payment protection
  • Risk
  • Overhead expense
  • Workers’ compensation
  • Business owner’s policy
  • Disability

While some of these policies are essential for operation, others are optional. Generally speaking, it’s best to yield to Murphy’s law when making insurance decisions - this is to say that anything that can go wrong probably will. The more insurance coverage, the more protection you have in every given situation.


Finally, everything could be going amazingly well in your tow truck business, and this is why you need tow truck financing. To capitalize on the success, you may want to expand the business whether this means a new facility, new vehicles, new employees…or all three. Often, there’s a difference between knowing that you need to expand and having the resources to actually do so. When trying to meet day-to-day costs, it’s difficult to save enough for expansion. Fortunately, we’re going to help with this very problem today.

When to Choose Alternative Financing

In the final section, we’re going to present some of the best methods of financing for your business. But first, you’ll notice that there’s a blend of traditional routes and alternative funding in the suggestions. But why would you consider the latter?

Fail to Meet Traditional Loan Requirements

Firstly, you might choose alternative financing because you’re struggling to meet the requirements for a traditional loan. As an example, you might have bad credit. After the global financial crisis back in 2008, lenders made it harder for businesses and individuals to access cash. If you don’t have the best credit history, you may struggle to qualify for bank loans. Don’t worry, you’re in the right place and you’ll see different forms of alternative funding later.

Access to Fast Cash

Another strong reason why you might choose the alternative funding route is when you need access to fast cash. For all the positives of choosing a bank loan, like lower interest rates, the process is painfully slow. You’ll need to complete a long application and then potentially wait many weeks for approval and then finally access to the money itself.

Let’s say that you’re hoping to expand the tow truck business - by the time you get money from a bank, the gap that you once spotted in the market could have closed. Alternatively, it could have been filled by another service. Once again, alternative financing is generally quicker in terms of the application, the processing period, and the funding.

At this point, we should note that the biggest problem that tow truck companies find with alternative financing is the rates. Compared to a traditional bank loan, the interest rates won’t be as generous. This being said, you can still limit the damage and make sensible decisions with some research.

Need Tow Truck Financing?
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Types of Tow Truck Loans and Funding Options

Whether you want to buy a new vehicle to expand the service or just meet day-to-day running costs, you should find something that matches your needs in the following list.

Traditional Tow Truck Loans

Firstly, for those with a strong credit history, you should explore the traditional bank loan option. Even if you decide that you prefer another form of tow truck financing, it’s still worth researching. Coming from the bank, you’ll typically enjoy the most favorable agreement both in terms of rates and repayment periods.

As we’ve discovered, the biggest problem is qualification if you have bad credit (not to mention the extensive application and business documentation requirements!).

SBA Tow Truck Loans

Next, we find similar loans but this time they’re partly secured by the Small Business Administration. Over the years, the SBA has helped many tow truck companies to access the funds that they need. Still offering favorable rates and terms, it’s a good way to borrow money without needing to secure the whole amount alone.

Yet, SBA loans don’t solve all our problems because people with bad credit can still struggle to meet the requirements. Additionally, it doesn’t help if you want a simple application process or access to fast cash.

Secured Tow Truck Loan

With this next suggestion, we move into the realm of alternative financing. Even if you have bad credit, you could secure a loan using assets owned by the business. For example, this could be a business property or vehicle. With the asset used as collateral, this is enough for lenders to increase their confidence in lending to you.

Of course, choosing this option presents its own risks. If you fail to meet the repayment terms, the lender could take the asset from you according to the agreement. When choosing a secured business loan, make sure that you have a strategy to make the payments on time and in full.

Tow Truck Cash Advances

Another potential option for your business is a cash advance, something that many tow truck companies have utilized in the past. How does it work? In short, you borrow money and promise the lender a percentage of all future revenue in return. Depending on the agreement, you’ll offer a percentage of revenue for the next three to 24 months.

Naturally, the benefit of this method is that you get an advance on all sales. If you have regular contracts with clients, you know that income in the future isn’t a problem. If revenue isn’t guaranteed, this is a riskier strategy. Ultimately, speak to our professionals at the South Florida Funding Group to see whether this is the right option for you. It could be a great way to meet your short-term needs without compromising the long-term health of the business.

Tow Truck Equipment Leasing

As we mentioned earlier, equipment is an integral part of businesses in this industry. If you’re looking for tow truck financing to invest in equipment, you might want to explore the possibility of leasing. Essentially, this is where you borrow equipment from the vendor and pay a monthly fee for the privilege. While you won’t own the equipment, you can at least get the equipment that you need without having to find the lump sum to buy it. So long as you keep making the monthly payments, you can keep the equipment in your business.

Tow Truck Equipment Financing

When reading about leasing, you might say, ‘well, I want the business to own the equipment otherwise the money isn’t going toward anything’. If this is the case, the solution you seek is financing. Like a phone contract or vehicle financing, the idea is to split the cost of the equipment over a period of months or years. This time, the monthly payments you make will go toward owning the equipment.

With both leasing and financing, the equipment itself is the collateral; this means that the vendor will take it back if you miss payments or otherwise go against the agreement. When the contract is over, you’ll then own the equipment (and all this without having to get a loan with bad credit!).

Tow Truck Lines of Credit

Finally, another example of tow truck financing is a line of credit. This is an ideal solution if you just want to meet running costs and small expenses. Working much like a credit card, the business has an amount of money available through a line of credit. If you want to buy a new printer, for example, take it from this pool of money. Whenever you use the account, you’ll then have to pay interest on the amount used.

As you can imagine, this is a great way to access funds without the long-term commitment that normally comes with it. Naturally, it might not suit your needs if you want to make a big purchase rather than something obtainable with a line of credit.

The South Florida Funding Group

Can you get tow truck financing with bad credit? Absolutely. Even if you don’t have access to traditional business loans or even SBA loans, we’ve hopefully eased some of your fears with the examples of alternative funding today. While some tow truck companies go for cash advances, others open lines of credit or use equipment leasing or financing to meet their needs.

In the coming weeks, remember that these solutions suit different situations. Consequently, you can’t do anything until you work out what you need. Will a business line of credit suffice, or do you need a larger pool of money? Why not contact the experts at the South Florida Funding Group for tailored advice? We could open your eyes to a solution that you didn’t even know existed for the betterment of your tow truck company!


The business funding you need when others say No!.

2569 Bay Pointe Dr.
Weston FL 33327




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