The phrase “no credit check semi-truck financing” sounds like a dream come true for some people looking for a new truck. What it means is an individual was able to get a loan for their vehicle purchase without having the lender looking into their borrowing history. The big question here is… Does no credit check semi-truck financing even exist?
Acquiring commercial truck financing that way is not completely impossible, but it is not necessarily easy to do. Additionally, you may find yourself in more of a hindrance than you would by going the more traditional application routes.
If you are an owner-operator with good business credit, decent annual revenue, and are working with a flexible lender who you’ve worked within the past you might be able to work out an affordable way to get credit check free financing. But what about everyone else? Must you have your credit looked into by businesses when all you want is a new truck?
Lucky for you, we have written an in-depth guide to aid you in your search for this type of program. If you want to brush up on your credit knowledge before checking out the ins and outs of semi truck financing with no credit checks, head on over to read The Truckers Guide to Understanding Credit.
Why It’s Hard to Find No Credit Check Semi Truck Financing
Frankly, finding any reputable lending sources that have no credit check business loans or financing programs are pretty difficult to come by. If a lender does offer a program like that, you should proceed with a bit of caution as this is outside the norms of the lending world.
The reason most banks and credit grantors want to see your credit is that they want to know if you’ll pay them back as promised. Your credit score and credit report are the fast and dirty way for lenders to see what types of risks you present them and their funds. Companies that forgo any type of credit check will possibly be looking to charge you with high-interest rates and large down payments to secure the money.
There is also a big risk that these companies are predatory and looking to lure in desperate people who need money but can’t go anywhere else. These companies may operate with shady contracts, high-interest rates, and hidden fees as their borrowers have no other lending options.
At the same time, other reputable banks and lenders might pass on the credit check if you present good bank statements and have a strong history with your business. For those instances, you’ll often need to be able to prove you’re in a pretty decent financial spot for most reputable credit grantors to skip a credit check.
Financing a semi-truck or trailer is no different than any other type of borrowing in that way. You are hell-bent on finding a lender will does not run a credit check, tread very carefully. Read all contracts and look into the business before you possibly sign all your money away to a predatory loan you can’t pay off.
In short, a good lender will want to assess their risks and rewards regarding who they are approving for loans and financing. Just as you should investigate their practices, those businesses need to know they won’t lose the money they lent to a customer. This is why credit checks are so important in the financial world and almost unavoidable.
Unless you can compensate with other strong credentials, there are few reputable companies that will give you an affordable semi-truck loan with no credit check.
Optimizing Your Semi Truck Financing Experience
If you are in the market for commercial truck financing, your focus should be on lenders who specialize in equipment financing. These companies provide you with the funds and help organize the purchase of your equipment.
Equipment lending companies secure the debt borrowed with the very equipment that was purchased. Meaning, if you get approved for semi truck financing, your truck will be the collateral for the financing itself. This way, truck financing is considered secured financing and allows you access to lower interest rates, longer terms, and much bigger loan amounts. If you were to just go out and borrow money in the form of loan and then use that money to purchase your own truck, you would be looking at an unsecured loan.
Unsecured loans are more credit history and income-focused as there is no collateral or assets to be pledged. These types of loans will often have shorter repayment terms and higher starting interest rates.
Due to the large amounts of money often needed to purchase a commercial truck, longer repayment terms desired, and the advantages a secured loan present, equipment lenders are the ideal companies to work with for semi-truck financing. Additionally, the approval process is more catered to trucking companies.
Why Do You Need No Credit Semi Truck Financing?
If you have done a lot of truck financing research, you have noticed that almost all leasing and financing companies want to see what is in your credit report or at least take a look at your score. As we mentioned before, a credible business will want to protect itself rather than lure desperate customers into high-interest loans.
Don’t feel discouraged, there are still options for you even if it means a lender looking into your report. So before you can decide what exactly you need from lenders, you need to think about why you specifically don’t want them to see your credit. Most likely, it is because you have less than perfect credit, you don’t want your score to be damaged by hard inquiries, or possibly both.
So, let’s explore your options here.
Your Credit is Not So Hot
If the reason behind your search for no credit check financing is because of your not so stellar credit score, there are many things that can help you. First and foremost, you can check out a lender’s minimum personal credit score they’ll approve. Surprisingly, there are companies that can get you approved despite your subprime credit history.
Another thing to consider is the equipment you are looking at. Make sure you are aware of the companies equipment restrictions, year and mileage limitations, and the total amount you can borrow. Often times, your approval odds will go up if you find a truck with lower miles and within their guidelines.
As we mentioned, semi truck financing is a self-secure debt. This means lenders are taking on a lower risk when lender than they would an unsecured loan. Because of that, equipment lenders can be more willing to approve individuals with lower credit scores. Additionally, credit is not the only factor lenders can consider in the semi-truck financing world. These will improve your approval odds.
Here TopMark Funding, for example, we take into account your time in business, your current fleet size, your business credit, the truck or trailer you are looking to purchase, annual income, the down payment you have available, and many more factors. There are many opportunities and ways you can present yourself as a strong borrower than just your credit score.
If your credit score is REALLY bad, there are ways you can help shape your credit up. You can check out our article on the basics of credit to see what negative factors are hurting your score the most.
You Don’t Want to Ding Your Score
Perhaps you’re not ashamed of your credit but rather, you don’t want any pesky hard inquiries on your report. This is a smart move as hard inquiries can ding your score up to 10 points! At the same time, the damage won’t last long. The impact of a single hard inquiry will drop after six months or so.
Hard credit pulls are a valid concern though. When it comes to financing, one application at a dealership could possibly send your information out to multiple banks. These banks then can put their own dent in your credit score, leaving you with multiple inquiries and a drop in your credit grade. If you are thinking about shopping around and exploring your rates, beware of the hard pulls.
This does not mean shopping around is impossible though. There are semi truck financing companies who can get you your terms and rates with a simple soft credit inquiry (these are the ones that don’t show up on your report). So, where are these companies?
Right here! Not to self-promote too much… but TopMark can get you pre-approved with a simple soft inquiry. This way, you can get your rates and terms with no ding to your score and zero commitment from you. If you don’t like what we offer, you can simply say no thanks and continue on your search for financing or leasing program that works for you.
Some Tips before you Apply
If you think your score is too low or maybe you want to get the best rates possible with the best score possible, there are many things you can do to help yourself out. Even if your search for no credit check semi truck financing is because you know you cannot get approved based on your credit, there are solutions.
Build Up Your Credit
You can build up your credit with a little bit of time and dedication. This will help you qualify for more affordable financing in the near future. The best way to do this would be with credit cards.
That doesn’t mean you should go out and apply for any and every credit card you see. This also doesn’t mean to go spending large amounts of money to boost your credit. None of that will help you here, especially if you have no credit history. In fact, too much new credit and high balances will harm your score a lot!
Do your research, find a good secure credit card and start strategically spending money over time to build up some credit history. With some months of careful spending an on-time repayment, your credit score can improve. This allows you access to better options than the possibly predatory no credit check financing lenders that might be out there.
Repair Your Credit
Another option that will help you get approved for financing is taking the time to repair your credit. If you have any debts that you can pay off, pay them down. Your overall credit usage and balances are the biggest impact on your score. Paying off any excess debt that you can be advantageous for you in the long run.
You can also spend some time focusing on improving your payment history. Make sure you make all your payments on time for a few months and focus on catching up on any delinquencies you owe.
Work On Your Other Assets for Leverage
We mentioned it a bit in the beginning, but you can help your approval odds by leveraging strong business credentials. By working on other factors in your business, you can prove that you are a trustworthy potential customer to financing and leasing companies. The overall goal is to show businesses that you are qualified and stable enough to outweigh your potential risks as a borrower.
Here are the things you can leverage:
Solid Business Credit
If your personal credit score is subprime, your business credit can absolutely be used as an asset. Strong business credit can express to lenders that you are good at managing your money when it comes to your company. Lenders are willing to focus on your business credit instead of your personal if your history has the depth and good score.
High Bank Statements, High Revenue
Business Owners who are less focused on credit and more focused on cash can benefit from using their revenue as leverage. Even if they have a thin credit profile, lenders to pay attention to how much liquid cash you have available. Your bank statements, monthly income, and annual revenue can help your approval odds a lot if you can show you can afford the equipment payments.
Available Down Payment
Another thing a lender cannot ignore is cold hard cash. Even if your score is on the lower side, a good down payment can be the turning point in getting you a good deal. If you do have the time to save up some cash to put down, it will increase your chances of getting an affordable semi truck financing payment.
If you have anything you can put up as collateral, you can get some leverage over your credit. Collateral further secures your loan and shows the lender that you are less of a risk. If your score cannot get you the rates you want, consider putting up some assets as collateral.
While no credit check semi truck financing may exist, but it is probably not the best option for you or your business. There are cheaper, safer, and easier options out there that can fit your needs. Even if you have bad credit and think you can’t get approved, there are things that can be done to help your approval odds. Additionally, you don’t have to harm your credit in the search for the perfect lender.
About TopMark Funding®
We’re a semi-truck and commercial vehicle financing company located in Roseville, CA. We specialize in commercial trucking and heavy equipment. With 20+ years of being in the commercial vehicle and equipment industry. Client satisfaction is our top priority at TopMark Funding®.
Our mission is to become your long-term financial partner by helping you grow your business and fleet. We’re not here for the short-term, we’re on long-haul with you. We achieve this by being your funding advisor, guiding you towards the best financial decisions for your trucking business.
Get Pre-Approved Today
If you’re in the market for a new or used semi-truck, commercial truck or vehicle we can help finance it for you. We have great rates, low down payments, and flexible monthly payments. We have lease and loan options for several different types of vehicles and trailers.
Fill out the contact form or give us a call at (866) 627-6644. One of our finance specialists will contact you as soon as possible to go over your truck financing needs and learn more about you and your business goals.