Best Transportation Business Loans Explained
Now, let’s take a deeper look at the top loan types mentioned above. Here we will consider the benefits of each loan type and we will provide a closer look at our recommended lenders.
Short-term loans are an excellent way to obtain the initial capital you need to open your transportation business. A loan can help you plan ahead for the next year or so, and allocate funds towards your planned objective. If you approach the right lender you won’t need a track record to obtain the startup finances you need to get you through the first few months.
The first six months are vital to the survival of your transportation business. You will need to build up your clientele and get your revenue rolling, in order to cover your expenses and any debt you may have. If you plan out your finances well, you may be able to repay your loan sooner than expected.
PayPal Working Capital has experience providing short-term loans for companies from various sectors. If you plan on using PayPal as one of your payment methods, a PayPal loan is an excellent option. It will likely help you out during the beginning stages of your business.
Equipment financing is another solid loan type. You can use equipment financing to buy vehicles, equipment, tools, and attachments. What makes this option appealing is that you generally receive all the funds you need - you can obtain up to 100% of the required value. An equipment financing loan is a great way to ensure you have all the trucking and logistical items you need when you open your door to the public.
While you can rely on your operating and capital funds to run your day-to-day business, your fleet and equipment are what will bring in the revenue. Without it, no transportation service will last for long. This is why an equipment financing loan is such an important loan type for entrepreneurs in the transportation business.
Funding Circle is a peer-to-peer network that also provides equipment loans. It has competitive rates. With Funding Circle you can also invest in other financing solutions once your business is up and running.
Invoice financing works as follows: a lender buys your current debt in exchange for a factor fee. There is no repayment period, as the lender takes a percentage of the money when your client pays. Invoice financing will help you when you are waiting for your customers to pay their outstanding bills. With payment clauses of up to 45 days, sometimes this can take time.
Invoice factoring is vital during your first year of operations. During this time you are establishing your client base. You may find that clients only pay you once a month or even more infrequently. Since you will need to cover daily expenses, you can obtain funds from an investor who’s willing to wait for the debt to arrive.
BlueVine offers several loan options; one of which is invoice factoring. BlueVine releases fund relatively quickly, ensuring that your transportation business can continue running while you await payment from your clients. BlueVine also lets you manage your payments via an online portal.
What happens when you’re not sure how much money you will need to cover your driver and employee wages, maintenance, or utility bills? A business line of credit consists of a lump sum that you can access when you need it, and you only pay for what you use. If you manage to maintain your payments for the loan term, the lender may expand the funds available for the next period.
Wages, fuel, and daily logistical costs are only some of the expenses you may need to cover on an ongoing basis. While you can use your capital and operating budgets to buy new assets and pay for rental space or vehicles, a business line of credit can help you when you’re in a pinch.
OnDeck is a great option if you are looking for a business line of credit. OnDeck isn’t too strict on credit scores, and it’ll provide you with flexible terms and rates to help you when you need it the most.
Small Business Administration (SBA) loans are provided by lenders approved by government entities. The government will guarantee up to 85% of the loan, giving you the freedom to plan for further expansion. There are several transportation grants that you may be able to receive funding from.
If you’re planning to expand your transportation business into other states in America and you need funding for more fleet and equipment, SBA loans are the way to go. You can use your current track record to facilitate additional funding.
While Fundera has a vast array of loan options, it’s also an approved SBA lender. It’s more than willing to work with startup businesses, as long as they have a viable business plan in place. If you’re looking to finance new equipment at the same time, you can add this to your application and Fundera will get back to you with a suitable offer.
Running a transportation business is not as cut-and-dry as many might think. There can be many months when business is slow but expenses don’t halt during that time. That’s when merchant cash advances offer financial assistance without the need for a traditional loan.
Whether you’re looking to keep your business afloat during difficult times or want to grow and expand into other states, Fora Financial can help you out. With merchant cash advances from Fora, there is no strict payback schedule and the flexibility allows a business to repay its debt in a way that is stress-free.
To qualify for a merchant cash advance from Fora Financial, your business must be operating for at least six months. It must also earn $5,000 in credit card sales a month for advances of up to $500,000.