How to Get Commercial Truck Financing with Bad or No Credit

Having good credit is one of the most important assets a person can have, especially if you’re a business owner. Without it, it’s hard to get a lease, a credit card, or in this case, a commercial truck financing.

Building good credit history can be tricky, how are you supposed to show a good payment record if no one will give you money in the first place? That’s a good question and where a lot of people get stuck spinning their wheels, now try adding a bank loan for your business needs in and we’re on a whole other plain field.

Luckily there are plenty of simple ways you can prepare yourself for the heavy-duty equipment you’re looking to purchase and our Kapital Venture team is here to help!

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Get the Best Commercial Truck Financing With These Tips

In this article, we’ll share a few tools to add to your credit-building toolbox so you can feel confident shopping for any piece of large equipment you might need.

Building Business Credit on Your Own
  • Some owner-operators work under a sole proprietorship; an unincorporated business owned and run by a single person with no clear distinction between the business and the owner. If this is you and are seeking commercial equipment financing, it is recommended to establish an LLC to ensure the company is seen as a separate business entity.

    Here’s a quick snapshot of what that looks like:
  1. Register LLC.
  2. Obtain an EIN Number.
  3. Open business bank accounts in your business name.
  4. Set up a dedicated business phone line in your business name and make sure it’s listed.

Similar to personal credit, your business credit creates a report that’s used later to obtain loans, increase credit lines, and secure more favorable financial terms.

  • When applying for commercial trucks or equipment financing, it’s important to check your business and personal credit score. An obvious but often overlooked step of the funding process. Experian makes it super-simple to get that info so you know what you’re working with. Creditors and suppliers use this key document to make lending decisions such as down payment, monthly installment amount, and whether or not you’ll need extra collateral. Already know your credit score but not sure what it means? Check out the range breakdown and where you stand.
  • Do you have collateral? Some loan terms require business collateral such as property or other commercial equipment you already own. Enlisting collateral helps build trust with the lender and lets them know you already possess something of value.
  • Get a credit builder loan. In this situation, the money you borrow is held by the lender and not released until the loan is repaid. It’s more like a forced savings program and your payments are reported to credit bureaus.
Rebuilding Bad Business Credit With Others
  • Use a co-signer. Though your credit score may be less than favorable at the moment, getting a co-signer with a better credit history can get you the green light you need for the financing you’re looking for.
  • Become an authorized user. If you have a business partner or close friend/family member willing to add you as an authorized user on an existing line of credit this can really help give you the boost you need. Doing so adds that card’s payment history to your credit files and can reduce the amount of time it takes to generate an increase in your FICO score. PRO TIP: You don’t have to actually use or even possess the credit card in order to benefit from being an authorized user.
What’s next for your business?
  • Request financing and speak with one of the team members. We are a wealth of knowledge and have helped many small business owners get into the equipment they need.
  • Learn more about the types of business loans Kapital Venture offers.

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