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How To Get Semi-Truck Financing
Looking to buy a truck and need semi-truck financing? This step-by-step guide will walk you through the semi-truck financing process. Whether you’re a truck driver, owner-operator, small fleet owner or own a large fleet, we have a commercial truck financing solution for you regardless of your credit history. We have the best semi-truck leasing programs that will fit your budget and help add more profit to your bottom line.
Deciding whether to get a truck loan or lease, choosing between new or used Freightliner, Peterbilt, or Kenworth. Partnering with a leasing company like TopMark Funding that understands the commercial trucking industry and all that comes with truck and trailer financing (titling, registration, insurance, warranties, etc.) is crucial to your success in the trucking industry.
Semi-truck financing is different from traditional vehicle financing and leasing. Traditional truck loans typically require your credit, business revenue, and time in business to determine if you’re qualified.
When it comes to semi-truck leases and loans, the truck you decide to purchase becomes the collateral, which helps to limit the lender’s risk on the truck lease or loan. By reducing the risk you’re more likely to be qualified for truck financing.
Several factors will determine your semi-truck financing terms, interest rate, and down payment. Here’s a list of all the truck financing requirements and factors that determine your eligibility and financial requirements.
Step-by-Step Guide for Financing a Semi-Truck
Before you go truck shopping it’s recommended to first get pre-approved for semi-truck financing. At TopMark Funding we have a quick and easy pre-approval process. One of our finance specialists will ask you a few questions about your credit and business history. We will then do a soft pull on your credit, not a hard inquiry.
The majority of our competitors do a hard credit inquiry. That’s not good for your credit score. Our pre-approval process is guaranteed not to harm your business or personal credit score. Once we get your credit results back we’ll get you pre-approved with the amount you’re allowed to finance.
HERE ARE A FEW FACTORS THAT DETERMINE ELIGIBILITY
- Credit Score – 600 or Above for the Best Semi-Truck Financing Rates.
- Time in Business with a CDL License – 3+ Years Preferred (But We Can Finance Start-ups Too!)
- Down Payment Amount – How Much Can You Afford to Put Down on Your Truck.
Making smart choices with semi-truck financing is critical to any trucking company. Having up-to-date equipment to maximize efficiency and stay in compliance with the ever-changing regulations is important to a company’s growth and sustainability.
We’ve made the semi-truck financing process quick and easy so you can get funded fast and on the road with your new truck!
SEMI TRUCK FINANCING AND CREDIT
When it comes to buying a big rig, credit can play a big role. When looking for a semi-truck financing, you need to keep your credit health in mind. A lot of truckers actually harm their credit by applying haphazardly to any and every company that promises they can get them the truck of their dreams.
What actually happens is a LOT of hard inquiries on your report. Remember, each hard inquiry can ding you about 10 points. If you even apply to 4 places, that’s enough to drop your score a whole credit grade.
Dealers are another avenue you want to be wary of in regards to credit. When you “apply” or see if you can get financed for a truck you like at dealership, what that dealers often do is send your information around to any bank or company they think you can get approved at. Again, this leads to many unnecessary and credit damaging hard inquiries.
Don’t worry, there are companies out there that can get approved for truck financing without harming your credit. We here TopMark Funding can help you by getting you pre-approved with just a soft inquiry. This way, you can see your rates without any damage done to your credit or commitment from you.
For these reasons, it’s important for you to be familiar with both your credit score and what financing companies can offer you at your current credit rating before you ding your score. Do your research and make sure you are making good choices for your business.
Click the link if you want to read our in-depth Semi-Truck Financing guide. Being knowledgeable about the process and what it means in terms of credit will help you make the best choices.
BREAKDOWN OF FICO SCORE RANGES
- 300-579: A score in this range is considered Very Poor. Credit applicants with a score in this range will often be required to pay larger fees and deposits, or sometimes may not be approved for credit at all. 16% of people have a score in this range.
- 580-669: Scores between the 580 mark to the higher 600s are called Fair credit scores. Often, people with scores in this range will be referred to as subprime borrowers. A total of 17% of people have a credit score in this range.
- 670-739: This range is referred to as Good. Individuals with scores this high have a much lower rate of default. Statistically, about 8% of applicants with a Good range credit score will become seriously delinquent. Around 21% of people have a score in this range.
- 740-799: People with scores in mid to top 700s are in the range of Very Good. Borrowers with scores in this range will receive better than average interest rates from banks and lenders. 25% of people have a score in this range.
- 800-850: The top of the scale is considered an Exceptional credit score. Individuals with a credit score above 800 receive the best rates from lenders. Around 21% of people have scores between 800-850.
Statistically speaking, most people’s credit scores fall between the range of 600 to 720.
WHAT AFFECTS YOUR CREDIT SCORE
- Payment history – This shows if you’ve made your payments on time or at all.
- Credit utilization rate – How much of your credit you are using on your credit cards.
- Type, amount, and age of credit accounts – Lenders want to see diversity on your credit report. Having a good mix of credit cards, a car loan, and maybe a mortgage helps your score.
- Total Debt Owed – This is the amount you owe in loans and how much is on your cards.
- Bankruptcies, Child Support Due, Public Records – Filing for bankruptcy or having a large amount of delinquent child support will hurt your score.
- New Credit Accounts – Opening a lot of accounts in a short period of time can hurt your score. If you have gotten too many loans or credit cards in a 2-year period, it can ding you.
- Hard Inquiries – The number of times a lender has requested your credit information will affect your score. These searches stay on your report for two years.
#2 FIND YOUR NEW OR USED SEMI-TRUCK
Here’s the fun part of the semi-truck financing process: shopping for your new big rig! When shopping for your new 18-wheeler you need to keep in mind some requirements the lenders have.
We always recommend buying your new or used semi-truck from a reputable semi-truck dealer. If you’re not sure which semi-truck dealer in your area is reputable, give us a call and we’ll have some suggestions at (866) 627-6644. We have a list of great dealers throughout the US.
- Make, Model, Year (Less than 10+ years)
- Mileage (Less than 700k)
- The truck needs to be for your intended use.
- Condition Report
- Any past major repairs.
- Preferably sold by a semi-truck dealer. (We can finance private party)
- Serial Number of the truck.
- Is the semi-truck new or used
- Minimum of 3 pictures
Lenders want to make sure the semi-truck you’re trying to buy is a good investment for you and will last the duration of the financing term. Also, the truck is the collateral for the financing.
If something were to happen and you can no longer afford to pay the loan or lease, the lender will need to repossess the semi-truck and recover their capital.
#3 FIND GOOD SEMI-TRUCK INSURANCE
Before you get approved and obtain your semi-truck financing, you’ll need to have commercial truck insurance. Commercial vehicle lenders will make sure you have good semi-truck insurance. Just like your personal vehicle, you’ll need good insurance for your big rig.
Just like anything else in life, you get what you pay for. Your semi-truck and business are valuable assets and you don’t want to be under-insured and liable for the potentially massive repair and legal bills.
Truck lenders require you to have the following coverage:
- Liability coverage
- Physical damage coverage
- Bobtail coverage for non-trucking use
- Cargo and storage coverage that covers what you’re hauling
If you own a fleet of semi-trucks and have employees driving for you, you’re going to need worker’s compensation. Contact your local business insurance agent for more details.
Lenders will not allow you to finalize the deal without the correct type of insurance for a semi-truck. If you have any questions please feel free to contact your finance specialist. (866) 627-6644
Learn more about Commercial Truck Insurance
#4 SUBMIT ALL DOCUMENTS AND GET FUNDED
Once you’ve picked out your semi-truck that meets all the requirements and you have the proper insurance in place, it’s time to finalize your funding. Contact your finance specialist to finalize your application.
Documents will be generated and then emailed for review and signature. An electronic signature is acceptable on most documents.
After the signed contract is returned, we’ll process your documents. Most transactions fund within 1 to 3 days. We have a fast turn around to get you the truck you want up and running.
About TopMark Funding
We have a proven track record of helping small businesses, owner-operators, fleet owners, and trucking companies like yours grow by offering great business financing options. We utilize our vast expertise in the truck financing and trailer financing industry to get you the monthly payments you can afford. Getting you on the road, increasing cash flow, and adding more profit to your business is our goal.
We’re your trusted commercial vehicle and truck financing company.
Get a Free no-obligation quote. Get pre-approved in minutes. Click the “Get Started Today” button!
Click the link for a complete guide on How to Get Semi-Truck Financing
Fill out the contact form or give us a call at (866) 627-6644. One of our truck financing specialists will contact you as soon as possible to go over your truck financing needs and learn more about you and your business goals.