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How Do You Qualify for Transportation Business Loans?
1+ Year in Business
$500,000 in Annual Revenue
600+ Credit Score
Whether you are a long-distance trucker who relies on his rig or a business owner who manages a fleet of school buses, you know that fast access to working capital keeps your most valuable resource rolling.
Repairs, routine maintenance, replacement, insurance, leasing or owning an overnight storage facility or yard, temporary warehousing, and the costs to run/maintain a trucking or transportation-based company can easily climb into the hundreds of thousands of dollars per year.
Transportation business loans offer a lump sum of capital for trucking companies to cover these expenses, preserve cash flow, and invest in their growth. Continue reading for everything you need to know about transportation business financing, including how it works, how to qualify, and how to leverage your funding to outpace your competition.
How Do Transportation Business Loans Work?
Transportation business loans work much like most other types of financing. You receive a set amount of capital, invest it into your business, and repay the borrowed amount through regular installments to your lender. Once you’ve paid off the entire amount, plus interest, your business has no debt attached to it.
Consistent, timely payments can build business credit if the lender you’re working with reports to a business credit bureau. Borrowers that miss payments regularly put themselves in danger of defaulting on the loan, which comes with numerous financial consequences that can make it harder to access capital in the future.
Fair warning: You may have to offer collateral to “secure” your financing, although this will depend on the financial background of your business and the lender you’re working with.
Benefits of Transportation Business Loans
Transportation business financing provides the capital needed to cover expenses and take advantage of opportunities. You can cover the cost of fuel, purchase/update your equipment, and bridge cash flow gaps whenever they arise, amongst many other business purposes.
Here are a few of the most noteworthy benefits of trucking business loans.
- Avoid Project Delays: Unexpected expenses and challenges can slow down your schedule and make it difficult to honor your agreements. With a business loan, you can solve challenges quickly before they affect your bottom line.
- Fast Funding: Banks and credit unions take an average of 90 days from application to funding, whereas non-bank lenders can have the funds in your bank account within 24 hours in some cases. They streamline the process as much as possible, so you don’t have to wait to take advantage of an opportunity.
- Preserve Cash Flow: Sizeable investments, like purchasing a new vehicle, can drain your cash flow and leave your business without liquidity for what’s around the corner. Instead of operating below full capacity, you can leverage a business loan to cover these costs and preserve cash flow.
- Flexibility: With various types of business loans and flexible repayment terms, transportation businesses can tailor their financing to their unique needs and maximize the profitability of each opportunity.
- Variety of Use Cases: There are no restrictions on how you use your funds. As long as it’s a relevant business purpose, you can invest and grow your business as you please.
Transportation Loans: How to Utilize Your Funds
The supply chain is more important now than ever before, especially with the emergence and popularity of eCommerce and online shopping. Transportation businesses form the backbone of the economy, which is why there are so many financing options available to entrepreneurs in this space.
National Business Capital’s transportation business lending options can help you:
- Add Vehicles to Your Fleet
- Purchase Inventory
- Hire Workers
- Cover Damages and Insurance Costs
- Manage Payroll
- Purchase Inventory
- And much more!
When you apply through the National Business Capital, transportation businesses get what they need in as little as 24 hours, so you can take advantage of any opportunity that comes your way ASAP!
Business Loan Options for Transportation Businesses
There are a few different types of trucking business loans, with each having its respective benefits and drawbacks for specific situations. Here are the most common types:
| Types of Business Loans | Description |
|---|---|
| Term Loans | Term loans are the most basic type of financing. You receive a lump sum of capital to manage over the course of your term while making regular payments to your lender. This structure provides predictability for your financial planning, since both the amount borrowed and the repayment schedule are clearly defined from the start. For transportation businesses facing large, upfront expenses—like purchasing fleet vehicles or upgrading equipment—a term loan makes it possible to move forward without disrupting your cash flow. Furthermore, term loans typically come with competitive interest rates and can be tailored in length and amount to best fit your business goals. Term: Short or long Funding Amounts: $10,000 to $5 million Use Case: Projects where you know the exact cost, working capital needs, etc. |
| Lines of Credit | Lines of credit are the most flexible type of financing. Instead of receiving a lump sum, you’re given access to a credit limit that you can draw from as needed. This flexibility is especially valuable for transportation and trucking businesses that encounter fluctuating expenses, such as fuel surges, unexpected repairs, or payroll timing challenges. Moreover, lines of credit allow you to borrow only what you need, when you need it, so you’re not paying interest on unused funds. As repayments are made, the available credit replenishes, making it a revolving resource that adapts as your business evolves. Term: Revolving, in most cases Funding Amounts: Lower than other forms of financing, but the revolving term allows you to draw the same funds after you’ve repaid them. Use Case: Projects where you don’t know the exact cost, recurring expenses, etc. |
| Revenue Based Financing | Revenue-based financing, often referred to as a business advance, offers short-term funding that’s repaid through a percentage of your sales. In most cases, this type of financing carries daily or weekly payments. This structure ensures that your repayment schedule aligns with your cash flow, allowing you to make manageable payments during periods of fluctuating revenue. Consequently, transportation businesses experiencing seasonal slowdowns or sudden surges in demand can maintain operational agility while avoiding the stress associated with fixed monthly payments. Qualifying for revenue-based financing is generally more focused on the strength of your business’s revenue rather than traditional credit scores, making it a practical solution for trucking companies navigating expansion or unexpected expenses. Term: Short-term (up to 18 months) Funding Amounts: Depend on your business’s profitability Use Case: Short-term business needs, where you’ll see a near-immediate ROI |
| SBA Loans | Small Business Administration (SBA) loans are a standout choice for transportation and trucking business owners seeking higher capital amounts with attractive repayment structures. These government-backed loans are known for their competitive interest rates, extended repayment periods, and the flexibility to address a wide range of business purposes, from fleet expansion to operational upgrades. Term: Short or long Funding Amounts: Up to $5 million with most programs Use Case: Almost any business purpose, although there are a few restrictions |
| Equipment Financing | Equipment financing is a specialized solution for businesses to purchase business equipment, such as trucks, trailers, and even CRM software. Once you’ve paid off the full amount, you get to keep the equipment, too. This option allows transportation businesses to upgrade their fleet or acquire essential technology without tying up substantial working capital, ensuring operational continuity and the ability to manage larger contracts. With tailored terms based on the lifespan and value of the equipment, monthly payments remain predictable, which simplifies budgeting and supports careful cash flow management. Equipment financing can also help your business stay competitive by enabling timely investments in the latest vehicles or technology, which may boost efficiency, safety, and customer satisfaction. Instead of waiting to accumulate the necessary funds and risk falling behind on industry standards, this approach gives you immediate access to the assets needed for growth while spreading the cost over time. Term: Long-term (5 years on average) Funding Amounts: Depends on the price of the equipment you’re looking to purchase Use Case: Specifically for buying equipment |
How to Apply for Transportation Business Loans?
Small business loans for transportation companies open up a new world of possibilities. Once you’ve identified a need for capital, follow these steps:
- Determine how much you need
- Research lenders and their programs
- Apply with multiple bank and non-bank lenders
- Review your approvals
- Select the option that best fits your business goals
It’s important to apply with multiple lenders to give yourself options to choose from. This way, you’ll never have to wonder whether the offer you selected was the right one – you’ll already know it was the most competitive option.
Our Business Finance Advisors leverage their experience to match your business with lenders that can offer the most competitive options, all while offering ROI guidance to ensure you’re able to use your financing to the fullest extent.
Trucking Business Loans as Soon as 24 Hours
National Business Capital’s expert Business Finance Advisors listen to our client’s current financing needs and assist them when planning for their firm’s financial future. We take an educational approach to each client, offering guidance and advice to maximize the benefits of your financing and cultivate sustainable growth in their businesses.
Our applications can be filled out and submitted in under a minute, and you’ll receive our decision within 24 hours. An open tax lien and even a bad credit score will not immediately disqualify an applicant. In making our financing decisions, National Business Capital considers the big picture.
The entire process is quick, simple, and designed to best suit the needs of an on-the-go entrepreneur. Apply now to learn the options available to you!
