What You Need to Know Before Applying for a Trucking Business Loan - National Business Capital


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What You Need to Know Before Applying for a Trucking Business Loan

The trucking industry is a vital part of the economy that provides essential goods to communities nationwide. Numerous industries rely on the trucking industry for sourcing the goods they need to keep running. Not to mention, the trucking industry adds thousands of jobs and brings in about $650 billion in revenue each year.

Like most entrepreneurs, trucking business owners know firsthand the financial burdens and cash flow constraints that can affect their business. Outside factors, like fluctuating gas prices, supply chain constraints, and changes in the labor and workforce, can make it tricky to predict business expenses.

Because of this, many trucking business owners might take a step back from growing their businesses in order to save for unexpected expenses. But, to start your trucking business or to grow your fleet, there’s one thing that you certainly need, and it boils down to financing.

What Is a Trucking Business Loan?

A trucking business loan is a way to access the capital you need to purchase a commercial truck, make repairs, and/or upgrade your fleet. A trucking business loan can also be used for more general business purposes, like purchasing fuel or inventory.

One great thing about financing with a trucking business loan is that it doesn’t require you to provide any additional collateral. Instead, the truck that you purchase serves as the collateral itself. However, some lenders might still prefer a down payment to secure the loan, which can usually be anywhere from 5% to 25% of the truck price.

The downside is that if you’re unable to make payments for the loan, the lender has the right to seize your truck in order to recover their losses. But one of the perks of financing is that once you pay off the debt entirely, you will be the full owner of your truck.

Commercial Truck Financing vs. Leasing

When looking into your options for purchasing a truck, it’s important to weigh the differences between financing and leasing your vehicle. Here are some of the main points to help you make your decision:

Commercial Truck Financing: Pros and Cons

Commercial truck financing means you will own your vehicle after paying off your financing loan. The truck loan is paid through monthly payments that go toward the equity in your truck. Once you have paid off the loan in full, you’ll own the truck and can continue to use it without making more monthly payments. Or, if you want, you can sell it for a new one.

One key point to be aware of is depreciation. As with all vehicles, it’s unlikely you’ll receive the full value you paid for when it comes to sell your truck. Nevertheless, you should still be able to retain a portion of your initial investment. Plus, the savings you’ll reap from financing over leasing should also help balance out your return.

Leasing a Commercial Truck: Pros and Cons

Commercial truck leasing allows you to borrow the vehicle as long as you pay consistent monthly payments. Commercial truck leases usually run for one to three years or longer, depending on the leasing company. 

With commercial truck leasing, you don’t actually own the vehicle, so there is less commitment compared to financing. Truck leasing is also more affordable in the short term, with fewer upfront costs and lower monthly payments. 

On the other hand, commercial truck leasing can have more significant restrictions on the truck’s usage since you don’t own it outright, and the monthly payments will not go toward your ownership of the vehicle. You will need to look for a new vehicle once your lease is over. For this reason, leasing can be more expensive than financing in the long run.

5 Benefits of a Trucking Business Loan

Financing allows business owners to ease liquidity concerns and ensure they have what they need to tackle challenges and grow their businesses. Take a look at some of the top reasons why trucking companies seek financing.

Cover startup costs

The initial costs of starting any business can pose a significant challenge. In many industries, the equipment alone can be the highest cost. With commercial truck financing, you can work with a lender to front startup expenses and break up large investments over time. 

Purchase trucks

By owning trucks instead of leasing, you’re investing in your business long-term by building up equity. You’ll also retain the option to one day sell or trade your vehicle if you choose. Over time, these moves can result in significant savings. 

Operating expenses

Purchasing costly vehicles is just one part of the expenses that trucking businesses face. You have to take into account costs for licenses, permits, insurance, taxes, fuel, highway tolls, and additional transportation equipment. Plus, there are also the ongoing costs of vehicle repairs and maintenance.

Trucking loans give you the wiggle room to cover operational expenses without jeopardizing cash flow. This way, you can focus on growing your business while still making consistent monthly payments.


While managing day-to-day expenses is critical, it’s also essential to have your long-term growth plans in order. Marketing is critical to promoting your brand and attracting new business—Trucking loans give you the means to accomplish this. Use financing to invest in ads, networking opportunities, and other promotion strategies.

Employee wages

In today’s economy, business owners struggle to find the qualified labor they need all too often. Wages are a top priority for both current and prospective employees. But, with financing, you can care for your current workers while attracting the right talent.

How to Choose a Trucking Business Loan

As a trucking business owner, you can choose to work with many different types of loans. Take a look at the most common.

SBA loans

Small Business Administration (SBA) loans are a government-backed financing option with benefits specifically for small business owners. They offer low-interest rates, high funding amounts, and repayment terms of up to 25 years. You can leverage this option to better break down the cost of an expensive vehicle with long-term monthly payments at affordable rates.

You can find SBA loans at banks, online lenders, and other qualifying lenders. Take a look into SBA loan requirements to see if you qualify.

Terms loans

Term loans are, in a sense, the most traditional type of business loan. They feature a one-time lump sum payment that’s repaid on a schedule ranging from one to 25 years. Term loans can be used for a variety of business expenses, but you’ll need to know the exact amount of funding you’ll require to avoid taking out more than you need. Knowing the exact truck model and its cost makes for a very straightforward use of a term loan.

Business lines of credit

A business line of credit is similar to a credit card for your business expenses. It’s one of the most flexible financing options available to entrepreneurs, as you can use your line of credit to access capital on an as-needed basis and pay interest on only the borrowed amount.

Revolving lines of credit allow you to pay off your balance and retake the same funds. You can also use your line of credit for many of your business expenses, not just equipment. For trucking companies, you can use your credit line to cover the costs of fuel, tolls, and other expenses.

How to Apply for a Trucking Business Loan

Applying for a trucking business loan is similar to applying for any business loan, with specific steps to take and certain criteria to meet. Get familiar with the process with these steps:

Step 1: Understand how much funding you’ll need

If you want to buy a truck, the first thing to do is calculate the cost of the vehicle you are interested in purchasing. If you’re planning to make investments in your business outside of purchasing commercial vehicles, you’ll have to forecast the costs for new employees, marketing initiatives, etc.

Step 2: Consider the requirements for a trucking business loan

You will have to meet certain criteria to qualify for a business loan, depending on the lender and the type of loan. If you are a young business and don’t have great credit to start, you’ll have better odds using an online lender. Similarly, if you need funding fast, online lenders typically have faster processing times and can move you from application to funding as quickly as 24 hours.

Step 3: Decide on the loan type 

It’s important to consider the type of loan you’re interested in before researching lenders. You want to familiarize yourself with everything available to you, so you can make an informed decision on the future of your business. Take a look at your business from a micro and macro perspective, and see what type of loan will fit your business best.

Step 4: Review different lenders

There are many different types of lenders available. Each lender will have their own eligibility requirements and differ from one another in some way. Depending on your business, you might be refused by some, while others might be interested in offering you favorable rates and terms.

Banks are one way to go about receiving a business loan. They typically offer low-interest rates but have some of the strictest requirements. For small businesses, start-ups, and those that need funding fast, online lenders can be a much more approachable option. 

Online marketplaces like National Business Capital connect you to a network of lenders via a single application. This way, you can save time and effort by streamlining your search. You can also use National to compare different loan offers and find the one that best suits your needs. 

Step 5: Submit Your Application

Once you’ve understood your business needs and have an idea of the type of financing you are looking for, you will want to prepare your application with the appropriate business documents, bank statements, and credit information. 

Banks will typically have rigid requirements, but online lenders can be flexible with your business history and credit, making it easy to find options that work for you. Application waiting times vary depending on your lender, but online lenders are a faster route if you need cash quickly. 

Apply for a Trucking Business Loan With National

As a trucking business owner, having a healthy cash flow is essential for covering operating costs and paying for unexpected expenses. Similarly, the quality of your fleet is of utmost importance. Trucking loans allow you to tackle multiple business needs in a manageable way—without jeopardizing your cash flow or sacrificing equity.

National Capital Business helps small businesses and entrepreneurs secure fast and affordable financing through a network of online lenders. With over $2 billion in funding through 25,000+ transactions, you, too, can secure the funds you need to grow your trucking business. Get started by filling out the online application.

Last Updated on January 30, 2023

National Business Capital helps entrepreneurs secure quick and fair financing to save time and cultivate sustainable growth.

Our stress-free online platform is designed for simplicity and speed, helping business owners go from application to approval in a matter of hours. And while we remain a leader in the Fintech industry, our clients agree it’s our personalized service and award-winning team that sets us apart.

From SBA loans to lines of credit, to equipment financing, and more, business owners can access all the different financing programs available to them in one place. Through our streamlined process, we have helped clients secure $2 billion in financing since 2007, and, more importantly, we’ve helped entrepreneurs save a tremendous amount of time and grow faster.

About the Author, Phil Fernandes

Phil serves as VP of Financing for National Business Capital. He boasts 15 years of sales experience, 10 years of managerial experience, and has been with National for over 6 years. His role at National focuses on managing and directing National’s team of Business Finance Advisors and overseeing project development. Phil is also responsible for Financial Reporting, where he prioritizes results and revenue growth. Phil is passionate about sharing his expertise and insight with small business owners, and regularly contributes articles on National’s blog. 


Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advice from National Business Capital and the author. Do not rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely on this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there may be errors, omissions, or mistakes.