Local banks rarely offer semi-trailer loans. If anything, they are different from standard auto loans for personal vehicles. Banks that provide funding to small businesses often refuse to fund trucking companies. Why? Banks steer clear from risky investments. They are aware of the fact that new businesses in the trucking industry have an infamously high failure rate.
If you have a commercial license, you stand a better chance of owning and running your own semi-trailer business. However, you still have a chance of running a semi-trailer business without experience or a Commercial Driver’s License (CDL). You first need to be aware of the hurdles you have to overcome before getting your fleet of trucks or semi-trailer financed.
Challenges of Obtaining Financing Without a CDL
Business owners often get turned down for semi-trailer financing. This could be attributed to the fact that they have not been in business long enough to provide proof of corporate tax returns. Most finance providers require at least two years of experience before funding costly equipment.
If you were to turn to the truck vendor to finance your small business, they would require you to be the operator and the owner of the semi-trailer. In other words, they can’t help you without a CDL license. Before throwing in the towel, there is one primary option to get your business up and running:
Finance Your Semi-Trailer Using an SBA Loan
If you’re a budding entrepreneur without a CDL and you wish to purchase a semi-trailer, apply for an SBA loan. Most of the time, the funds you receive are enough to buy all the equipment you need for your business. Also, there are no fast and hard rules in regards to the borrower owning a commercial driver’s license. Most lenders have their own set of internal corporate regulations that help them determine whether a CDL is a requirement or not. It is up to you to carry due diligence and find the right SBA lender that rules out the need for a CDL for your semi-trailer business.
Since SBAs lenders of this kind consider semi-trailers valuable assets, they typically use them as collateral for the loan. If the borrower (business owner) can inject a down-payment of between 20 to 25%, the lender will finance up to 80% of the semi-trailer or fleet of semi-trailers. The best part is that there may be no need for extra personal collateral. This may solely depend on the total cost of the project as well as price breakdown by category.
Get the Best Semi-Trailers from Mickey Today!
The kind of trucking business you get into will have plenty to do with the quality of your semi-trailers. Before purchasing one, it is crucial to understand the various models of trailers and their uses. If it is your first time in the trucking industry, trust the experts at Mickey Genuine Parts to steer you in the right direction. Contact us today from anywhere across the United States for assistance in all your trailer and transportation needs!