How to Get Semi Truck Financing with Bad Credit

Alternative Small Business Funding

Owning a semi-truck can open plenty of doors in the business world. You might already have a trucking company and be looking to expand your fleet. Or you might be trying to replace an aging vehicle. At other times you will be wanting to purchase a semi-truck so you can start your own trucking company.

However, if you have poor credit, this can become a substantial roadblock. Many financial organizations have become unwilling to lend to people with bad credit. This can make you feel like your goal of owning a semi-truck is slipping through your fingers.

But you don’t need to worry. Our team understands what you are going through and we are here to help. We offer a range of bad credit truck loans. Let’s take a closer look at what these are and how you can use them to your advantage.

How a Credit Score Works

The best place to start is by talking about your credit score. This is also known as a FICO score. It will range from 300 to 850. The higher the score, the better.

This is used by banks and other financial institutions to rank how much of a financial risk you present. People with bad credit can seem like a bigger risk, as they have a history of being unable to make repayments on their debts. There are a few ways that issues with bad credit might manifest themselves, including:

• Harder to get a loan. Some lending institutions will refuse to give people with a low credit score a loan.
• More collateral. Because a bad credit score means that there is a higher risk that you will default on debts, the banks will want more protection. As a result, they will demand more collateral, resulting in more stress for people with bad credit.
• Unfavorable terms. Another way of getting compensated for the higher risk is by increasing the interest rates. This can mean that you are paying a lot more money to the bank over the life of the loan.
• Larger down payments. Sometimes, you will need to gather a substantial amount of money as a down payment. This can be an alternative to putting up a lot of collateral. This approach means you will need to spend more time struggling to save money, forcing you to delay the purchase for months or years.
• Lower loan amounts. Finally, you might find it harder to get a substantial amount of money. This can limit the type of semi-truck, forcing you to stick to cheaper, less reliable brands and setting you up for higher mechanic fees in the future.

In most cases, you will experience a few of these problems at the same time. If you have been looking for bad credit semi-truck financing you know first-hand how serious these issues can become.

If you want to know what your credit score is, you will be entitled to a free credit score report. You can do it through the AnnualCreditScore site. You will be allowed to do this once a year. This will give you a better idea of how a potential lender will view you.

How is Your Credit Score Calculated?

Because of how important your credit score is, it’s a good idea to have an understanding of how it is calculated. There is a range of inputs used, each accounting for a percentage of the overall score. Here’s how the process works:

• Payment history. This is the most important aspect of your credit score, accounting for 35 percent of the score total. You need to focus on paying all your bills on time.
• Amount owed. This is the other significant aspect, making up 30 percent of the score. The more you owe, in relation to your available credit, the worse your score will become.
• How long your credit history is. This counts for 15 percent of the score. A long credit history shows banks that you consistently make your payments.
• The number of new credit lines opened. Making up 15 percent of the score, this area records the number of times you tried to open a new line of credit.
• Credit mix. This accounts for 10 percent of your credit score. Lenders are looking for a range of credit types like auto loans, student debt, and a home mortgage.

Ways to Improve Your Credit Score

There are a few ways that you can work on improving your credit score.  The best option is to focus on repaying your debts. You can try consolidating your debts into a single monthly fee, which is easier to keep track of. It’s also a good idea to make sure that you are making all your payments on time. You also want to make sure that you are limiting the number of hard credit inquiries you are making. This includes things like applying for new cards and loans.

It might be a good idea to sit down with a financial advisor. They will be able to take a closer look at your finances and come up with a plan that works for you.

While it can be a little difficult to put these things into practice, you will see results. As your credit score improves, you will find it easier to get the money you need to take out loans. The only problem is that this is a gradual process. It can take months before you see results. The good news is that you don’t need to wait that long. You can turn to an alternative semi-truck financing provider. 

Getting a Semi-Truck Financing Despite Having Bad Credit

Though bad credit can be a roadblock, it doesn’t need to stop you from purchasing a new semi-truck. The most common way to get around this issue is by heading to an alternative financer. They won’t mind taking on someone who has a history of bad debt.

There are a few other circumstances in which they can get you financing for your semi-truck. These include:

• People dealing with a recent bankruptcy
• Start-up companies who are trying to get ahead in the business world
• Owner-operators looking to add to or improve their fleet
• Those who have a history of repossessions

If you aren’t sure whether you will qualify, don’t be afraid to get in touch with our friendly team at South Florida Funding Group. We will be able to talk you through your options.

Other Elements the Finance Company Will Consider

While your credit score is an important element, it isn’t the only thing that the finance company will consider when deciding whether to approve your loan. For example, they will also look at the history of your company. If you have been in business for a long time, you have a lot of contacts and insight into the industry. This can help you build a profitable company.

They will also want to have a look at the balance sheets. This can tell them about the cash flow of the organization and any existing debts that you might have. This provides a better indication of the potential risks that you will post.

If you are a start-up, you might not be able to meet these requirements. That’s okay. The finance company will want to see a business proposal. This will give plenty of insight into how you intend to run the organization and the chances of long-term success.

When thinking of starting a business, it’s a good idea to register the company and get it set up before you approach a financier. There are a few reasons that you should do this. First, it shows that you are serious about wanting to turn the business into a success. Secondly, they would rather prefer to deal with a business than a person. A company will be better able to handle the expenses involved with owning and operating a big rig than a person will.

What to Know When Looking For Semi-Truck Financing

Before you start looking for bad credit semi-truck financing, you should look at your budget. There are a few figures that you need to work out. These include:

• Type of truck. Think about the type of things you want to be hauling. If you are new to the industry, it can help to talk to other truck drivers. Consider things like mechanical issues and fuel economy. These will determine how much it will cost to run the vehicle.
• Payments you can afford. Look at your business budget and figure out how much you can spend on the truck each month. Don’t forget to factor in the additional income the truck will be bringing in. If you aren’t confident with this, you should have a chat with an accountant.
• The amount you can put down. The next element to consider is the amount of money you can put down. The more you can save up, the less the regular payments will be. Again, it’s best to discuss this area with an accountant to find what will work best for you.
• Who will finance the truck? Lastly, you want to make sure that you are doing some research into which company you intend to use to finance the truck. Pick something that has a good reputation. It’s also a good idea to look at the customer reviews, so you know people are satisfied with the results.

When you are making these arrangements it’s important to be realistic. You don’t want to overstretch your budget and end up with a truck that you can’t afford. This will lead to major problems in the future.

It’s also a good idea to remain flexible. There are some elements that you won’t be able to predict or control. This includes the interest rate. This will impact the monthly repayment rates.

How Does This Process Work?

Even if you have bad credit, you will be able to get a big hood truck. This process can be broken down into a few simple steps. Here’s how it works.

Credit Assessment

The first thing to do is determine your financial history. This will allow us to find the best plan to suit you. There are a few ways that you can do this. You can either give us a call, and we will guide you through. Or you can head online and fill out a form. Either way, this process will only take a few minutes.

Pre-Qualification

Next, we need to pre-qualify you. This involves finding out if we will be able to loan you. This will be based on the answers to the credit assessment process. There are other elements that we will need to take into account. For example, we will need to think about the type of truck you want to buy and how much you intend to put down as your deposit.

Finding the Ideal Truck

Once we know how much you can spend, it’s time to get started looking for the right truck to suit your needs. As we’ll discuss a little later, we have plenty of top brand names. Your budget will determine whether you’ll be able to get a new truck, or if you’ll need a used one.

Test Drive

You will be spending a lot of time behind the wheel of the truck. So, it’s important to take a test drive. This ensures that you will be getting something that will be comfortable to drive. When buying a used big rig, get the mechanic to check it out. If you like the truck, we can move on to the next step. If not, try to find another model that will be a better fit.

Discussing Approval Terms

Before you sign anything, it’s vital to have a clear understanding of the obligations. You need to be confident that you will be able to make the payments. It’s also important to know the steps that will be taken if you fall behind. You might want to have a lawyer look over the agreement. If you are happy with this agreement, we can move on to the next step.

 If you aren’t, you can negotiate. For example, increasing the down payment will decrease the amount that you will be expected to pay each month. Our team will be happy to talk you through your options, to come up with something that works for you.

Signing the Agreement

Once you have got an agreement you like, it’s time to put pen to paper and sign the documents. After you do this, we can get to work making the final arrangements and getting your truck organized.  

Getting Your New Truck

Now comes the fun part. You will get your semi-truck. You’ll be able to put it to work, incorporating it into your business and using it to help you make money.

What Types of Trucks Can You Get Financing For?

We are pleased to offer a wide range of brands for you to choose from. This includes that you will be able to get one that you will be proud to drive. These options include:

• Kenworth
• Peterbilt
• Volvo
• Freightliner
• Mack
• Western Star
• International
• Autocar
• Many More!

Why Use a Truck Financier?

Now that we know a little more about bad credit truck loans it’s a good idea to think about why you should turn to a truck financier over a traditional bank.

Sometimes, the answer will be simple. The bank turned you down for the loan because of your poor credit score. But even if this isn’t a hurdle, there are some reasons why a truck financier can be a good option.

First, they have a good understanding of the trucking industry and the pressures that accompany it. They will be more understanding if you have a setback. This empathetic response will make dealing with them a lot easier.

Secondly, they are typically able to offer better rates than the major banking institutions will be able to provide. They will also be more willing to take on customers who might be deemed to be unsuitable for traditional banks. This ensures that you will be able to afford your truck.

Thirdly, they know the risks associated with the trucking industry. Because of this, they will be able to talk with you about your budget and plan. This will allow them to come up with the ideal plan to suit your needs. They will strive to make sure that you can make the repayments, setting you up for long-term success.

Contact Us Today to Get Started

Unfortunately, in many cases, banks aren’t the best choice for semi-truck finance. They don’t understand the business. Because of this, they can become hyper-focused on the credit score, searching for reasons to deny your claim. As a result, people with bad credit won’t get a good deal, if the bank agrees to give them money at all.

If you are looking for an alternative semi-truck financing provider, who understands the challenges of the industry, give our team a call. We can talk you through the options and get you pre-approved over the phone within a few minutes. Before long, you could be behind the wheel of your dream big rig.

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