Commercial Truck Financing Options For People With No Credit

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Commercial Truck Financing Options For People With No Credit

6 March 2017
 Categories: Automotive, Articles


Commercial trucks represent a significant financial investment, which is why many people choose to finance the purchase with loans. However, this can pose a challenge for people who have no credit history or poor credit due to past mistakes. Despite this, it is still possible for people in this situation to get money to purchase a commercial truck. Here are three options you should investigate.

Lease the Vehicle

Instead of purchasing the truck outright, it may be a good idea to lease your commercial vehicle. Leasing is similar to renting, except you'll typically have the option to buy the truck at the end of the lease period if you can obtain financing.

Leasing can benefit you in several ways. The monthly payments can help build your credit score, which will make it easier to qualify for a loan at a later date as long as you make the payments on time. Second, truck technology changes at a rapid pace. Leasing lets you get a newer or different model truck at the end of the lease period if that's what you desire. Lastly, leases typically don't require as much of a down payment as a traditional loan, which can help you save money.

Be aware, though, that you have to stay on top of the truck's maintenance and take care when driving it around. You may be charged at the end of the lease for any excessive wear and tear. It's also important to do your homework when shopping for a leasing company. Some companies have less-than-favorable terms (e.g., large payments, required to make repairs at specific places), so be sure to thoroughly read the contract—or have it reviewed by an attorney—to ensure you're getting a good deal.

Government Grants and Financing

You don't need good credit if you pay cash, though you still want to make an effort to improve your score. Therefore, a second option for financing a commercial truck purchase is to obtain government grants and loans. The government doesn't care about your credit score, only that you have the ability to repay the loan and that you don't owe back taxes, fines, or other money to it. You will also often get a better deal on interest and loan terms through the government, since the purpose of grant and loan programs is to help business owners rather than make a profit.

Grants don't need to be repaid, so you should look into these opportunities first. Grants.gov and the Small Business Administration websites are two of the best places to go to learn about available programs. Use the internet to search for grants from private organizations as well. For instance, the National Association for the Self-Employed gives $4,000 grants to members.

The Veteran Administration and US Department of Agriculture are two other government agencies that provide loans to qualified businesses. It's a good idea to visit their websites or contact the agencies directly for more information about available loan programs.

Contract Directly with the Seller

A third option for financing a commercial vehicle is to contract directly with the seller. For example, some dealerships have a "buy here, pay here" model where the dealer finances the vehicle, and that's who you pay every month. The qualification for getting the loan are typically lower than with a traditional bank. However, you may have to pay a higher interest rate for the money.

Owner-operators have also been known to set up payment arrangements with new owners. In this scenario, you would simply make regular payments to the previous owner of the truck until it's paid in full. Like anything else in life, be sure you're dealing with a reputable person who will offer good terms and follow through on handing over the title when you submit the last payment.

For help with financing a vehicle, contact a commercial vehicle dealership, such as Arrow Truck Sales.