If you’re looking to buy a truck, the smartest move is to lease it. It will automatically make you a truck owner while sidestepping the sticker shock.
But before jumping right into the signs and handshakes, you need to understand the entire process of semi-truck financing, and also how to proceed with it.
1. Have proper information
Purchasing a semi-truck might be intimidating for you, especially if you’re buying it for the first time. You can easily qualify for a lease. Know all appropriate leasing companies to avoid any fraud. Taking a loan is also an option to buy a truck, even though it is not used frequently. It’s better to consider all the pros and cons of both before making your decision.
2. Prepare yourself to apply for financing
- Make sure you know your credit situation.
- Plan out your payment schedule and stick to it strictly. The best way is to have a contract; it will showcase your ability to secure work.
- Keep an eye on your income tax situation as well. Make sure you have filed the tax returns and have paid all the due amount.
- Go for the leasing method that best suits your business requirements. It would help if you took advice from a trusted, qualified accountant.
3. Know the expected results
Keep yourself away from stress by knowing what to expect when applying for semi-truck financing. Here are a few tips:
- Make sure your documents are in order.
- Make sure your business is registered before applying.
- Fill out the application with the help of a financing company.
- Once it is approved, thoroughly read it and understand the lease structure, the length of the agreement, monthly payments, and interest rate.
- Your process can be completed within 24 hours.
4. Be aware of your credit score
Before getting on with the leasing process, have a look at the credit score. While you might not need a perfect credit score to be suitable for a commercial truck lease, you still need a credit score of 600 or more for it.
A lower score can have a considerable impact on your down payment, minimum payment, and interest rate. So owning a good or decent enough credit score is the key to a smooth and stress-free process.
5. How much should be your down payment
There is no strict rule for a down payment, and it majorly depends on the leasing company of your choice and your business. The applicants are generally scored based on the type of their business and also their personal credit score.
If your credit is strong enough, there might not be any down payment to be made. Most funders only ask for the minimal. However, credit is not the only determining factor. Some creditors also ask for the financial statements regarding the type of equipment and exposure amount. A down payment dramatically reduces your monthly installments.
Trucking businesses usually bring out a shining success rate. So make sure to know all the tips and tricks to start it.