Your commercial vehicles can be the backbone of any business with trucking requirements. Keeping them in good condition can help you generate revenue. Commercial trucks can be expensive to maintain, so you must plan for unexpected and recurring operating costs. Continue reading to learn more about truck financing.

What Does Truck Repair Cost?

Semi-trucks require annual maintenance and repairs of around $20,000. Semi-truck tires can cost upwards of $5,000 each year. The brakes, wiring, and air hoses are all everyday items that must be repaired or maintained. These are only some of the typical costs associated with owning large trucks. Multiply this number by how many trucks you have and include a contingency fund for unexpected costs. Truck repair costs can quickly add up.

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What is a Truck Repair Loan?

Truck repair loans are a unique financing option that helps with commercial truck maintenance and repairs. These loans are available to fleet owners, independent operators, and anyone who needs repairs for a commercial truck.

Loans for Truck Repair

Many options are available for truck owners looking for financing for repairs and maintenance. Let’s look at some of these most popular options.

Equipment Financing loans

Equipment financing loans are available to those who own trucks or equipment. They can use the collateral to fund maintenance and repairs. Your equity in the equipment must be greater than the cost of repairs to qualify.

If $10,000 is for repairs, then the truck’s value must be less than $10,000. The lender will consider the liquidation value for your assets in determining the truck’s worth, not the price you paid.

Small Business Term loans

These small business term loans allow you to borrow more money while making smaller monthly payments. Lenders are willing to lend up to two times the monthly revenue of your business. However, your loan’s interest rate and length will depend on your credit history. Reporting term loans to credit bureaus. The interest paid on small business loans can be tax-deductible.

Merchant Cash Advances

They operate under a daily payment structure where payments, each business day. This option may provide temporary relief, but it can also cause a strain on your cash flow. The annual percentage rate of borrowing can range from 50% to 200%.

Using a Factoring Company

A factoring company can help companies with outstanding accounts receivables get their funds faster. Factoring is when a company sells its receivables to a third party for lower cash.

A business with $100,000 in receivables due within 60 days can sell its invoices directly to a factoring firm to instantly get funds. After the invoices have been, the factoring company charges a fee.

A factoring company is not required to report equipment repairs to credit bureaus. Raises concerns. It will not help you build credit. Factoring companies can also charge a high cost for borrowing, especially if it is to an annual percentage rate. In some cases, it can exceed 60%.

How do I apply for a truck repair loan?

Applying for a truck loan for repair is similar to applying for a regular loan for business. There are additional components, such as the truck’s condition and applicable licenses. Here is a list of the information you need to submit to get a truck repair loan.

  • Personal information (e.g., Personal information (e.g., driver’s license, proof of address)
  • Information about business (e.g., Articles of incorporation, Corporate Profile
  • Financial information, including income and revenue (e.g., tax returns or bank statements
  • Evidence of insurance and relevant truck licenses
  • The truck’s current condition can be in the details

Faqs about Truck Repair Loans

Can truck repair shops offer financing in the USA?

Some truck repair shops offer financing in-house or loans through their lending partners. You can finance and repair your truck from the same place, making it a very convenient option. But, this convenience comes with higher costs, so it is a good idea to compare your options with other truck loan lenders.

Do I buy a new truck or fix my old one?

If your repair costs exceed the truck’s current value, selling the truck and purchasing a new one may be a good idea.

Can I get a truck loan for bad credit?

There are truck repair loan specialists for lousy credit, just like truck financing lenders. These lenders often consider financial factors other than credit, such as income, debt levels, and assets.

Do You Need A Loan for Truck Repairs?

Truck repair loans for fleet owners and independent contractors who need to finance the high-priced maintenance and repairs of commercial trucks.