Dump truck financing can be difficult. Dealers don’t always have programs that help. And regular banks have all but gotten out of the commercial truck financing game. So how does someone grow their business? Here is a list of ideas that can help get around these obstacles.
The first is to find a seller that will take payments instead of a full payoff. Both dealers and private parties will consider doing this. Why would they want payments instead of being paid in full? There are tax benefits for a seller to take payments instead of full payment. They can avoid the capital gains tax and if they hold the title they can perhaps continue to take the depreciation. They may be in the middle of a lawsuit or divorce where they don’t want to “show” a lot of cash. Another reason is that they are likely to charge interest on the loan. This is additional profit and many equipment owners make a business out of doing this.
The second solution is to use a cosigner. The good part is that you can get a good interest rate if the cosigner has excellent credit. The bad news is that this approach has lots of snags to it. First the cosigner would have to have a CDL. A few years ago someone could use their grandmother as a cosigner but those days are gone. Everything has gotten tighter and the use of cosigners is no exception. In many cases they have to be considered a partner in the business. This would have to be backed up with articles of incorporation and bank statements. This approach definitely has it’s pros and cons
The third option is the use of additional collateral. There are financing companies that specialize in working with people with bad credit. They get around it by getting the title to other trucks the customer owns. They can also use heavy equipment or equity in real estate. A cosigner can put up collateral for the customer if they don’t have collateral themselves. And, no the cosigner doesn’t have to have a CDL! This can be a good option because the financing companies don’t typically have a minimum credit score so they can work with almost anyone. Also, they work quickly. Companies like this can be found on the internet or in trucking publications like Truck Paper.
There are ways to get around bad credit. It does take some homework but you can get the financing you need if you can pull resources like the ones mentioned above. The approach you want to take is to compensate for the credit issues. In lieu of good credit, your exchanging a cosigner or additional collateral for example.
Capital Solutions is a commercial truck financing company specializing in customers with bad credit. We finance semi trucks, dump trucks, and other work trucks for people in all 50 states. We can be contacted at http://www.capitalsolutionsonline.net