Do Box Truck Financing for Startups Business Owners Really Work?

Author: Rohan Paulos
Updated On:

Are you planning to buy a box truck for your startup? Well, for startups, it can be very challenging. Box trucks are costly vehicles, and funding for such trucks can be difficult for most startups.

However, this is not an impossible task as you can take the help of box truck leasing for start up business programs to get finance your new startup business.

Here you will easily learn about box truck leasing for start up business or simply how to finance your box truck

Understand Your Eligibility for Box Truck Leasing for Start up for Business

Every box trucking financing company has different requirements. So, you should confirm that with your lender. However, some basic eligibility guidelines that you should keep in mind as you prepare for truck leasing for start up business:

  • CDL- You will be considered a high-risk borrower if you don’t have a CDL.
  • Minimum credit score- It can be around 600 to 650. With a better credit score, you will enjoy more benefits.
  • Truck mileage and age of the truck that you want to buy.

Vitals Doc for Box Truck Financing for Startups

Well, the document required by the lenders will vary. But some common documents that you may need to submit are:

  • Past and current bank statements
  • Documents that can prove your startup is registered.
  • Your business’s current profit and loss statement
  • Business tax return
  • USDOT- United States Department of Transportation number
  • Current financial year’s balance sheet.

Commercial Truck Financing Companies for Startup Businesses

  • Box Truck Financing Lenders in the USA

The lender has years of commercial box truck lending experience and offers custom financing as well as leasing options. 

One of the best truck financing companies offering varied interest rate and terms based on the type of box truck lease or loan you want to apply for. 

The company offers financing facilities for everything, but you will have to make sure that the box truck should be seven years old and below. 

The minimum loan amount is $15,000. To get qualified for a loan requires you to have at least a credit score of 670 and more. Also read about how much does it cost to wrap a truck in USA?

A toy truck carries bundle of dollars

  • Wells Fargo Commercial Truck Loan

Well, here is another highly rated and one of the best commercial truck financing companies out there. Fargo is well-known for offering the best types of commercial box truck loan programs.

You can also enjoy impressive standard and open-ended leases, term loans, equipment loans, and more. 

The repayment terms will vary based on the vehicles. For example, a box truck loan can last up to 84 months, and for a specialty vehicle, it can range from 36 months to 84 months. 

  • US Bank Box Truck Loan

If you want to get a commercial box truck loan without making any down payment, then US Bank’s box truck loan can be an excellent option for you. 

One of the best truck finance companies, it also offers flexible loan repayment terms. If you meet the eligibility requirements, you can also get pre-approved easily.

Box truck loans can be up to USD 500,000.  The bank also has a faster process for getting a box truck loan of up to USD 15,000.

As the bank provides up to 125 percent financing, you can easily finance 100 percent of your box truck. It also has some box truck loan options for people with lower credit scores. 

A toy tipper truck and coins

How To Choose The Best Truck Leasing Company?

When searching for financing companies to buy box trucks, you will find multiple options. That makes the process of choosing the best one complicated.

However, here are some tips that you can keep in mind to make the process easier for you. 

  • Check The Interest Rates

Like other loans, you should try to secure the best equipment financing or truck financing with the lowest interest rates. 

Interest rates can increase the total amount you will have to pay for the truck. The experts say the interest rates can be based on different factors.

The factors may include the loan’s length, the total amount you want to borrow, your credit history, the financing company you secure the truck loan from, etc.

Based on these factors, the interest rates can vary from 4 percent to 20 percent based on these factors. If you have a positive credit report, you can expect a loan with a lower interest rate. 

  • Length Of The Loan And Monthly Payment

One of the most important considerations is the monthly payments. Based on this, you can determine whether you will be able to afford the truck or not.

But this should not be your only factor of consideration, as you can adjust this to lower the payment. 

As per the experts, if there is a higher interest rate and the length of the commercial truck loan is 15 years instead of 5 years, you will pay more, even though your monthly payment is low. 

Before finalizing your option, you should search around and don’t forget to use an online truck financing calculator

Enter the balloon payment amount, cost of the truck, interest rate, and loan tenure to get an idea about what you can afford.

A tipper truck with some cash

  • What About The Prepayment Penalties?

As financing companies earn money by charging interest, many companies would want the borrowers to be paying off the loan as long as possible.

So, while choosing a box truck financing company, you should check whether the company charges any penalty on prepayment. 

The penalty can go up to 2 to 3 percent with some companies. But as you will be paying off your truck loan early, you should not be fined for that. 

  • 100 Percent Financing Of Used And New Vehicle

If you have not yet decided whether to buy a used or new box truck, you should look for a financier who can finance both new and used trucks.

Besides, make sure that the company can finance the entire box truck. This way you can save money.

Some companies can finance 100 percent of the price of a new truck and around 120 percent of the MSRP at a fixed interest rate on used or new box trucks for up to 90 months. 

Choosing a financing company with different options will help you decide. Only the best company can offer competitive rates and meet your budget and needs. 

Once you choose the right company, apply for a loan based on your requirements and get ready to buy your truck to expand your business. 

A smiling truck driver

Choose The Right Truck

Choose the right box truck, and make sure it has functioned for less than 700,000 miles if you buy a used box truck. Besides, ensure that it is less than 8 years old.

Get An Insurance

You can’t apply for a loan if you don’t have the right insurance plan for your truck. So, get proper and sufficient insurance coverage.

You can also take expert advice on this to choose the right insurance plan based on the value of your box truck.

The Process Of Getting Box Trucks Financing for New Business

Making a smart choice with the best box truck financing solutions is important to small-scale trucking companies.

You should have updated equipment and trucks to enhance efficiency and remain compliant with the regulations.

To help you with this, financing companies have made the process easier and quicker. Let’s look at some basic steps of getting a commercial truck loan.

  • Apply Online

You can visit the official website of the financing company and then click on the get loan option. Now you need to fill up the contact form.

After that, one of their executives will call you back to understand your financing requirements.

  • Choosing An Option

A truck financing expert will call you to know more about your funding and business requirements. They will understand your requirements to offer the best solutions to meet your goals.

man inspecting a truck engine

  • Review Of Documents

Once done, documents will be generated, and they will email the documents for signature. Most companies accept an electronic signature.

  • Get Your Loan

After submission of all the required documents, your application will be processed. The entire process can take around 2 to 3 business days.

Different Commercial Truck Financing Options

You will enjoy multiple funding options when working with a professional box truck financing company for box truck leasing. Some of the most popular options are:

Working Capital Finance

This can be an excellent option if you don’t have a good credit score and want to secure financing faster. Before applying for this, prefer to check the eligibility requirements.

Equipment Financing

Some well-known financing companies easily offer loans to lease your box truck and other required equipment. Equipment financing is quite popular among small businesses.

Asset-Based Funding

If you want, you can use your box truck as collateral to get asset-based financing. In general, such a type of financing can offer you a better financing term and rate.

No matter what your business credit score is, many companies offer such financing options so that you can expand your business without any hassle.

Family helping out with the packages

FAQs

Should Your Lease Or Finance Your Commercial Box Truck?

If you are in the market for a box truck, financing can be a great option compared to leasing. Box trucks can cover a million miles before you need to take them to the garage.

That means your truck remains productive for around seven to eight years.

What Should Be Your Credit Score To Get A Commercial Truck Loan?

Most financing companies may require a personal credit score of around 650. But you can also avail a loan if the score is below 650, but the interest rate will be more.

Will The Lenders Pull Your Credit With An Inquiry?

Yes, every lender will check your personal and business credit score during your credit application process. It helps them to offer you personalized service.

However, choose a firm that does a soft credit history pull as it will not affect your credit score.

Is It Possible To Get A 100 Percent Financing Option?

Yes, most companies have now started offering a 10o percent financing option to the customers.

Remember that such financing options can come with a higher interest rate. So, if possible, go for a loan with a down payment.

Do Financing Companies Offer Startup Financing?

Yes, they offer such loans. But due to the risk involved with the startups within the trucking industry, getting 100 percent financing can be a challenging task.

So, they may ask you to make a down payment of around 20 to 30 percent.

Conclusion

Nowadays, you can easily get a box truck financing program, whether you have a small business or a large one.

However, it is advisable to maintain your credit score to enjoy some benefits, like better repayment terms, lower monthly payments, lower interest rates, and more.

Besides, you should choose a company that can offer customized financing plans based on your requirements. There are several financing options, and all you need to choose is the best one to get started with this.

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