Trucking Business Loans: Best Options to Consider in 2024

Small business loans allow truckers to buy their own truck without having to pay for it upfront. Often, truckers will find it easiest to obtain equipment financing. In this type of lending, the equipment is held as collateral. Other types of small business loans for truckers include term loans, invoice factoring, and merchant cash advances.

Our team of financial experts found the best loans trucking businesses. Whether you’re just getting started or are battling poor credit, we’ve found a business loan to meet your needs.

While there are several things to consider when choosing a trucking company loan, a few factors can help narrow the decision.

In this review we highlight the terms, rates and fees of each lender and explain what makes them a good option. We also share potential downsides of each lender, and provide a rating methodology you can use to select the best option for your needs.

Best Trucking Business Loans for 2024 - Full Overview

Our experts have rounded up some of the best loans for truck drivers including the following:

How to Choose The Best Trucking Business Loan

• Loan Features: When considering loan features make sure to evaluate the loan terms, options for repayment, and the amount of loan available.
• Application Process: Another factor to consider is how invasive the application process is and what information they require. This includes whether the application has a hard-pull or soft-pull credit score impact, the amount of time it takes to receive funds, and any distinctively competitive offerings.
• Interest Rates and Fees: Loans for truckers can carry different types of fees and interest rates depending on the type of loan. Be sure to take these fees into account when determining your budget.
• Qualification Process: What will you need in order to qualify for a trucking business loan? Be sure to look at the minimum credit score, annual revenue, and business history requirements before applying.
• Customer Support: When considering loans, consider whether you will have access to a live customer service rep, whether you can receive support online or through a mobile app, and if there is any supplemental information and tools to help you along the way.
• Online User Reviews: Perks and Bonuses: Also consider what special options a lender offers such as payment flexibility, advertising transparency, and advanced technology.

What Are Trucking Business Loans?

A trucking business loan provides funding to truckers who are looking to purchase their own truck or expand their fleet. This makes it possible for truckers to purchase a truck without having to have the cash upfront or pay for it all at once. Small business loans for truckers can also help pay for things such as maintenance of the truck, payroll for employees, fuel, and parts.

Types Of Business Loans For Commercial Truckers

There are several types of business loans that truckers may want to consider including:

• Equipment financing: Equipment financing is specifically designed to obtain new or used equipment. These loans typically carry lower rates than other types of loans, but the equipment is used as collateral. They can be a great option for trucking companies.
• Term loans: Term loans are loans that are taken out and paid off over a specified period or term. These loans can have fixed or variable rates depending on the type and lender. Terms can also depend on the status of the business, how long they have been in operation, how much money they generate, as well as the business’s credit score.
• Invoice factoring: Invoice factoring is a funding system in which outstanding invoices are sold to a third party at a discounted rate. The company is then responsible for collecting payment and will take part for their service fee. This helps trucking companies get paid faster and can potentially reduce cash flow problems.
• Merchant cash advance: For a merchant cash advance, a company will receive a one-time lump sum payment in exchange for payments based on credit card sales. These payments are run through ACH. The lower the transactions, the less money that is automatically collected.

The Cost of Running a Trucking Business

According to The Trucker Report, the average cost of operating one commercial truck each year is around $180,000. And that’s once you’re up and running.

Starting a truck business can cost as little as $15,000 or as much as $150,000–or more. A lot depends on whether you already own a truck, how many vehicles you want in your fleet, and whether or not you plan to hire additional drivers. Fuel prices alone can have a big impact on your bottom line.

Here are a few expenses to consider:

• Equipment: New trucks can cost as much as $150,000, while used can cost as much as $80,000. Renting trucks can get expensive quickly–plan on $800-$2,500 per truck.
• Fuel: Diesel can cost as much as $70,000 per year.
• Maintenance: Repairs, tires, and other costs add up to about $4,000 per truck per year.
• Documentation: Plan on spending around $3,000 on documentation, including an MC/DOT number, business fees, a Commercial Driver’s Licence (CDL), United Carrier Registration (UCR), BOC-3 Form, and more. Note that documentation requirements will vary depending on state law and the types of materials you’re transporting.
• Insurance: As an owner-operator, expect to pay $3,000-$5,000 per year on insurance.
• Taxes: Typically equal between 25% and 30% of your income and should be paid quarterly.

How Can You Use Trucking Business Loans?

Trucking business loans can be used for a variety of reasons including:

• Purchasing the first truck: Truckers looking to purchase their very first truck will need an abundant amount of cash to do so. Business loans can help.
• Adding a new truck to the fleet: Even established truckers may not have the funds to purchase outright a new truck to add to their fleet. Trucking company loans can help provide the funds to growing businesses.
• Payroll: Loans such as business lines of credit can help truckers bridge the gap between busy seasons to pay for expenses such as staff payroll.
• Taxes and insurance: Trucking loans can help business owners pay for the taxes and insurance they need to keep their trucks on the road.
• Fuel and toll costs: Gas prices fluctuate. Lines of credit and working capital loans can help truckers keep up with rising fuel costs.
• Maintenance and parts: Purchasing a truck isn’t the only expense you’ll need to worry about. You’ll also need to take care of it. The costs of maintenance and parts can add up quickly. Funding can help make sure the repairs are completed when needed.
• Upgrade trucking technology: Equipment funding can help truckers upgrade their trucking technology, such as GPS or automatic logging systems, without digging into their cash reserves.

How to Get a Trucking Business Loan

If you’re in the market for a trucking business loan, there are a few things you need to make sure of in order to maximize your chances of securing financing:

• Time in business: Lenders prefer to give money to businesses that have established business history. The longer your time in business, the greater your chances of obtaining financing. Some lenders have a minimum time in business requirements of 6 months to a year or longer. 
• Credit score: Qualifying for truck financing also depends on a company’s credit score. The higher the score, the greater the chance of lower interest rates. While some companies may extend funding without favorable credit, it’s less likely and will cost more in interest in the long run.
• Annual revenue: When securing financing, it’s important to have revenue that lenders can see. A business loan for a trucking company may come with annual revenue requirements.
• Using trucks as collateral: Equipment financing typically uses the truck as collateral. This means that if you don’t pay your loan, the lender can confiscate your truck.
• Complete and accurate information: Most lending companies will require at least some paperwork. Having the necessary, and accurate, information available will enable the lender to complete the process as quickly and smoothly as possible, upping the chances of receiving funding.
• Down payment: Some lenders will require a down payment in order to obtain equipment financing or another type of funding.

Conclusion

Trucking businesses can make good money, but it’s expensive to get started. This is where business financing comes in. Truck financing can help owners get their business off the ground or help them expand. Our experts reviewed lenders that understand the needs of truck owners, giving them options to obtain financing regardless of their situation. Truckers who are ready to make the leap to truck ownership may find help in one of these financing options.