5 Ways To Get Commercial Truck Financing With Bad Credit
Posted on: 6 February 2015
When you are starting a business that will provide trucking services, such as deliveries and pick-ups, purchasing the trucks might become a hassle if you have bad credit. However, don't panic, because it is still possible to get financed for a commercial vehicle even if you have poor credit. Here are some different ways to get financing for a commercial truck even with bad credit.
Resolve Issues on Your Credit Report
Any time you are planning to get financing, you should always start by requesting a copy of your credit report from all three major credit bureaus. Get your report from Transunion, Equifax, and Experian. You need all three because some information might only be on one of these reports. Go through each item on the report and check it for accuracy. If anything looks amiss, get it resolved before applying for financing. It also helps to have the reports so you can explain them when you meet with the loan officer.
Use a Truck Financing Company
For commercial trucks, you will have much better luck going through a special truck financing company, instead of a traditional auto loan financing company. Look for reputable companies that specialize in loans for commercial trucks like semi-trucks and tow trucks. They are already aware of your needs and the cost of commercial trucks, and will help you get financing. Some of them also specialize in people with bad credit. The alternative is to go through your own credit union if you have one.
Get a Co-Owner to Sign With You
Do you have a co-owner or partner in your business? If so, ask them to co-sign with you. Even if they don't have the highest credit score, it can still help with two people applying for the loan. Find out if the co-owner has a higher credit score than you, because that will definitely help. What will be even more beneficial is if you can get a co-signer with a good credit score. This tells the financing company that they will take over payments if you fail to do so. It lowers your risk and increases the chances of being approved for the loan.
Put Down a Large Deposit
Commercial trucks are expensive, much more so than traditional vehicles. You should put down a large deposit as a way to tell the bank you intend to make payments and you are willing to show them you have money to do so. Instead of just choosing a dollar amount, try to give a percentage of the cost of the truck you need, such as 20 or 30 percent of the total cost. This will definitely increase your chances of approval for financing.
Present Collateral
If you own other vehicles, such as a personal vehicle, or your own home, present that as collateral. Financial institutions and lenders want to have protection just in case you can't pay your monthly payments on the loan. If you show that you have collateral that could help pay the rest of what you owe for the loan, you will be more likely to be approved.
To get started buying your own truck, contact a dealership like Arrow Truck Sales.
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