Commercial Truck Loans

Getting a truck loan can help with buying new equipment, maintaining your current fleet, and taking advantage of new business opportunities.

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This article contains general information and is not intended to provide information that is specific to American Express products and services.  Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.  

What is a commercial truck loan?

A commercial truck loan is a type of specialty financing aimed at providing funding for businesses in the trucking industry. Borrowers can use this industry-specific loan for several purposes, including purchasing vehicles, making equipment repairs and hiring new drivers.

 

There are many financing options for this type of business funding.

How do commercial trucking loans work?

Applying for a commercial truck loan works in much the same way as other types of small business loans. To get started, the borrower—typically the business owner—will fill out an application and supply necessary documentation. Then the lender will review what's submitted and make a lending decision.

 

Applicants will likely need to be in business for a minimum of one year in the trucking industry, demonstrate a certain level of consistent revenue, and have a healthy credit score.

 

If approved, lenders offer different types of rates and terms, as well as various repayment plans such as annually, quarterly, or monthly.

 

Loans can also be used for day-to-day operations, maintenance or even business growth, such as:

  • Padding to an existing fleet
  • Hiring new drivers
  • Covering travel costs
  • Repairing truck engines or replacing tires

Types of trucking business loans

A commercial trucking company or trucker can consider multiple financing options, including lines of credit, equipment financing, and Small Business Administration (SBA) loans. 

Business line of credit for trucking companies

A business line of credit is a type of revolving credit in which lenders approve you up to a certain credit limit. You can then draw from your line of credit up to this limit and pay interest on the amount borrowed. You can keep making withdrawals as long as you're paying down your loan, similar to how a credit card works.

 

One of the main advantages of this type of loan is that you're not borrowing more than you need, and you can get access to funding when you need it. For instance, if you want a line of credit in order to cover daily expenses, such as tolls and travel costs, you can make withdrawals relatively quickly.

SBA loans for trucking companies

The SBA offers loans for qualifying small businesses at low interest rates. If approved, you may be eligible for loans up to $5 million.

Some qualification requirements for SBA loans include:

 

  • Meeting industry standards for annual receipts and number of employees
  • Doing business in the U.S.
  • Being current on other government loans or taxes
  • Holding equity in the company

Most likely, you'll need to provide a down payment, but that's typical of many other types of commercial loans.

 

To apply, you can contact your local bank, find your nearest Small Business Development Center and meet with an SBA representative or look for approved partners through the SBA's Lender Match feature.

Equipment loans

Equipment loans are a type of installment loan used to cover associated costs for daily operations for your trucking business. For instance, you can take out a loan to replace existing equipment, repair your trucks or buy a new truck. In some cases, you may need to put up collateral to secure the loan.

 

For instance, you could use an equipment loan to purchase a commercial truck. Once you complete your regular payments, you'll own the vehicle outright.

Equipment leases

Equipment leases are much like a personal auto lease, in which you agree to make payments to use a commercial vehicle until the end of your agreed-upon lease term. In most cases, you won't need to make a down payment.

 

Keep in mind that equipment leases are generally for new commercial vehicles, and you don't own the truck after your lease is over—unless the lender offers a purchase offer.

When should I apply for a trucking loan?

Before applying for a loan, consider whether this is the right time to seek financing by asking some key questions:

  • Can you fully leverage the funding to benefit your business? That means that you intend on staying in your business for the long term or are interested in expanding your fleet.
  • How long have you been in business? Many lenders require borrowers to have established their business for a minimum of one year or another set period.
  • Can you afford the cost of financing? Factor in the cost of interest rates, lender fees and the down payment on top of your day-to-day expenses.

You will also need to determine how much to borrow and whether you're interested in a one-off loan, such as an equipment loan, or if you'd like flexible access to capital as needed, such as line of credit.

How to get financing for a commercial trucking business

Though each lender has their own process, here's the general procedure on how to get financing for your trucking business:

  • Review lender requirements
  • Fill out an application form — it may be more streamlined to fill out an online application
  • Provide necessary documentation, such as proof of business income, collateral or down payment amount, and business license
  • Depending on the loan, you may also need to sign a personal guarantee
  • Once the lender approves your application, review and sign closing documents and let the lender know where to send the loan proceeds

The material made available for you on this website is for informational purposes only and is not intended to provide legal, tax or financial advice.  If you have questions, please consult your own professional legal, tax and financial advisors.  

 

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