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How to Apply for a Semi-Truck Loan

 

Now is a great time to enter the commercial trucking industry. With the demand for drivers higher than ever, you can expect job security, great pay, and plenty of stories to tell from your time on the open road. While trucking is an excellent and prevalent career choice, being the most common career in 29 states across the U.S., it often requires upfront investment to get started. Just like owning a business, truckers have to pay their overhead. This can include purchasing the truck, replacing parts, and taking care of costly repairs.

If finances are holding you back from your new career as a trucker, or if the truck you currently own is in need of updates, financing may be the solution for you. Luckily, companies like Mission Financial are here to help you get the financing you need. Here is what you need to know about financing through Mission Financial.

Commercial Financing Options

Mission Financial offers financing for dealerships as well as owner operators. While we provide loans for new and used trucks, we also offer financing options for other trucking necessities including:

  • Tire Replacements
  • Operating Capital
  • Lease Purchase Buy-Outs
  • Loan Refinancing
  • Truck Repairs
  • Licensing and Permits

Commercial Vehicle and Business Auto Loans  

When applying for commercial vehicle financing, it is important to understand that a business auto loan is much different than an auto loan one would normally get for personal use. Due to the stricter rules surrounding commercial loans, it is more important to make payments on time. The interest rates for business auto loans can also be much higher than other loans. While a personal loan typically has an interest rate of 5 percent or less, interest rates on commercial trucking loans can range between 5-30 percent. These differences will be important to understand and recognize when applying for financing.

How to Apply for a Semi-Truck Loan

Before applying for financing, there are a few things you will need to have ready. Follow these steps to make sure your application process is as smooth as possible.

 1. Determine Eligibility

Before applying, it is important to check to see if you qualify. Qualifying factors include your credit score, how long you have had your CDL, your down payment, and the age of the truck. If you are a first-time owner operator or have a low credit score, you can still qualify for a loan through Mission Financial. In fact, our company specializes in low credit loans. While you may still choose to apply for a loan, it is important to understand your financial state before taking this step.  

2. Gather Needed Info

Even before shopping around for a truck, you will want to get all of your paperwork in order for your financing. This is an important step because when you find the perfect truck, you will need to act fast. If another buyer comes in while you are trying to gather information, you may miss out on the vehicle. Before applying for financing, have the following information on hand:

  • Cell phone contact
  • Current Commercial Driver’s License (CDL)
  • Proof of insurance with at least a $1,000 deductible
  • 6 references or 10 references without active phone bill
  • Bank statements and/or tax returns

Depending on your financial situation or employer, you may also need the following information

  • Co-signer Statement
  • LLC Agreement & Operating Agreement
  • Articles of Incorporation & Corporate Resolution

3. Find Your Truck

Once you have determined eligibility and gathered the necessary information, it is time to find your truck. It will be important to find a truck that meets the hauling requirements of your business.

After you have found the right vehicle, be sure to negotiate the price and get a written quote on the purchase of the truck. Along with the price, the written quote will need to contain the following information:

  • Title and Vehicle Registration
  • Pictures of the truck you wish to finance
  • Original signed credit application
  • Guarantee of Title

4. Get the Right Insurance

It is possible to get pre-approved without insurance. However, providing proof of insurance is highly recommended when applying for a commercial loan. Your insurance needs will be based on the type of business, but most truckers need the following types of insurance:

  • Primary liability coverage
  • Cargo coverage
  • Bobtail coverage for non-trucking use
  • Physical damage coverage

5. Submit Your Documents to Mission Financial

Once you have completed the above steps, it is time to apply for financing through Mission Financial. Having everything you need ready in advance will make the application process go smoothly for all involved parties.

Applying for commercial truck financing can seem like a daunting task. However, with companies like Mission Financial that specialize in semi-truck and business auto loans, we are ready to work with you to get you on the road in no time.

What to Consider When Financing a Truck With Bad Credit

 

Bad credit can leave people feeling stuck. Without a good credit score, buying a house, a car, or paying for school can feel difficult or even impossible. Additionally, making a big purchase with bad credit can mean you pay more in the long run. In fact, when applying for an auto loan, those with bad credit can end up paying 311 percent more in interest than someone with “very good” credit. And starting a business or buying a freight truck can feel just as intimidating and impossible when your credit is less than perfect. However, this does not have to be the case.

Having bad credit doesn’t mean you cannot jumpstart your career as a truck driver or finance a new truck. With the trucker shortage causing the demand for qualified and capable truck drivers to skyrocket, there are large incentives to get truckers out on the road with or without excellent credit. Here is what you need to know about financing a semi-truck with bad credit.

Use Your Assets as Collateral

Those with good credit can often use their positive history as a way to get a loan. For those without good credit, finding another way to secure the loan may be necessary. One great way to do so is to put up some collateral.

Collateral is anything you own that can be pledged to the loan provider until it is paid in full. These are often an option for people with bad credit, because if the loan is not repaid, the lender knows they can seize the collateral and use the money from it to repay what is owed to them. There are two forms of collateral to keep in mind: Hard and paper collateral. Hard collateral consists of homes, businesses, cars, and anything else that would have to be liquidated to cash in the event that it was seized by the lender.

Paper collateral includes stocks, bonds, and other items that would be easier to convert to cash. It is important to understand the difference between these two types of collateral before applying for a loan. Paper loans are often much easier to liquidate, making them more appealing to a potential lender. If offering some sort of collateral seems like the best course of action for you, consider making a list of your assets that could be used as collateral.

Use Your Commercial Truck as Collateral

Sometimes, you can even use your semi-truck as collateral when applying for a truck loan. You will still have to make monthly payments on the truck, but the financing company will know they can seize the truck and sell it if you are unable to pay. When securing a loan for a commercial truck, it is also important to remember that you will be receiving a business loan. Business loans are different than standard loans, and with that comes unique rules for both you and the loan provider. These rules make it easier for the lender to seize property if they are not receiving payments. This means that while it may be easier to secure a loan with bad credit, there will be faster and harsher consequences if you are unable to abide by the terms.

You May be Eligible for a Grant

Grants can be another great way to secure funding for your new semi-truck. Luckily, there are a variety of grants for truckers to apply for. Depending on your experience level in the field, you may be qualified for different grant options.

Mission Financial Specializes in Bad Credit Financing

Bad credit does not have to stop you from your career goals. When applying for a loan, it is especially helpful to work with a lender that specializes in low credit financing like Mission Financial. Mission Financial Services has been providing commercial auto loans and refinancing options for over 19 years. As a direct lender, we offer loans through dealers as well as direct lending in 48 states.

Mission Financial is proud to be a common-sense lender. This means we analyze more than just your credit score. We examine each applicant’s overall credit, instead of only the number on your credit report. If you are willing to put up collateral and have a history of on-time payments, you are likely to be approved for a loan with Mission Financial.

Cass Freight Index Report Remains Optimistic For 2019

 

With the start of the new year, the commercial trucking and freight industry faces many obstacles. The trucker deficit continues to increase, and the high tariffs against China are projected to have great implications on exports in many parts of the U.S. However, despite growing concerns and harsh year-over-year comparisons, the Cass Freight Index report for January 2019 remains promising. Here is what you need to know about the Cass Freight Index report’s outlook for trucking in 2019.

What is the Cass Freight Index Report?

The Cass Freight Index report is a monthly publication released by Cass Information Systems. Since 1995, this report has been a highly trusted source of insight into the trucking industry and how it correlates with the wider economy.

The Cass Freight Index is often referenced by news sources and industry professionals. This report is also considered by many logistics executives and analysts to be the “most accurate barometer of freight volumes and market conditions.”

January’s Cass Freight Report Insights

When examining December and January’s data, the untrained eye may see a negative report. From January 2018, this year’s January report is down 0.3 percent. Additionally, January is down 1.2 percent compared to December 2018. Annually, December was also down by 0.8 percent.

January and December were the first two months in the last two years to reap negative numbers. However, the author of the Cass Freight Report, Donald Broughton, states that this is not a cause for concern. Because December 2017 and January 2018 were all time highs for shipment growth, a slight decrease this year simply means that freight flows are stabilizing.

Shipments May Continue to Lower

The author of January’s report also states that shipments may continue to show negative results through the coming months. Broughton explains that this may be the case due to the following factors:

  • Increasingly difficult annual comparisons
  • Transportation infrastructure at or near full capacity
  • Low employment making it difficult to grow the active workforce

The Trucking Industry in 2019

Despite the negative numbers, Broughton ensures there is no need for alarm. In fact, the trucking industry is holding more promise in 2019 than previously expected. The report states that before January, many analysts and industry experts believed there was no way for 2019 to surpass the exponential growth seen in 2018. However, the outlook on 2019 has now changed. While many still don’t believe we will see comparative numbers to 2018 throughout the year, the report anticipates growth at an above-average pace will be seen.

Possible Storm Clouds

The report remains optimistic for 2019 growth. However, it also states that there are two “storm clouds” on the horizon that should not be ignored. When considering the freight industry in 2019, these two international issues should be considered:

Higher tariff threats with China

At the beginning of January, the U.S. had raised tariffs against China by 10 percent. Now, there is a threat of raising these tariffs to 25 percent in the coming months. China is the world’s second largest economy, and the increased tariffs could have real implications on the U.S.A.’s agriculture exports, along with other raw materials. If even higher tariffs are put in place, the freight industry could see a real decrease in volume.

The Decline of WTI Crude

In December, WTI Crude oil reached a low of $42.50 per barrel. This caused the oil to become less profitable, which in turn led to less incentive to drill for this oil. However, at the time of the report, WTI Crude was back up to $51 per barrel, which has led to some optimism on this front. However, there is still uncertainty about the future of crude fracking throughout 2019.

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