Trucking Company Business Loans

Trucking company business loans are moderately easy to obtain given that a substantial amount of the capital that is being sought is going to be specifically used for the acquisition of trucks and trailers. Given the ongoing demand for interstate and intrastate trucking services, most financial institutions are willing to extend substantial amounts of credit – either in the form of a business loan or a line of credit – in order to commence revenue-generating operations. One of the nice things about a trucking company is that they are usually able to generate revenues immediately given that these businesses can partner with freight brokerages that will provide them with the ongoing orders for merchandise transportation.

This is a very important thing to note within any documentation that is going to be presented to a financial institution given that they want to see that the business will be producing income very quickly from the onset of operations. One of the key things to also explain to a loan officer is that almost 90% or more of the capital needed will be used specifically for the acquisition of vehicles, trucks, trailers, and equipment that is normally used in conjunction with the rendering of trucking services. At the time of this writing, most trucking companies charge somewhere between $1.90 to two dollars per mile for long-haul merchandise transportation services. One of the things it also needs to be shown to a financial institution is the fact that a economic recession only has a modest impact on a short-haul or long-haul trucking companies ability to generate revenues. This is primarily due to the fact that many businesses are immune from negative changes in the economy, and they’re going to continue to need to have their goods and wares transported from one location to another regardless of whether or not there is economic prosperity or an economic recession.

A business plan specific for a trucking company is also going to need to be provided given that was all financial institutions require this type of documentation for any business loan that is over $10,000 to $50,000 – depending on the financial institution. This business plan needs to have an overview of the services that will be rendered to the general public and business public while concurrently showcasing the anticipated revenues, operating expenses, profits, cash flow, and balance sheet. For many entrepreneurs, the development of a trucking company business plan is typically the most difficult aspect of obtaining a business loan given that this is a very large-scale document that needs to be properly produced and shown to either an individual loan officer or a lending committee. For anyone is having trouble developing this type of documentation, many certified public accountants as well as qualified business plan writers are able to provide this service for a moderate fee. Generally, the fee for developing a business plan specific for trucking company ranges anywhere from $600 to $2000 depending on how in-depth the lending institution wants the document.

A modest amount of information regarding how the trucking company will market its services to the general public should be included as well. However, as discussed earlier – most trucking companies and related merchandise transportation firms typically are able to generate revenues by establishing ongoing relationships with freight brokerages as well as companies that have ongoing trucking needs. Given the complexity of merchandise transportation, many companies almost always outsource their needs to third parties given the complexity of hiring direct employees to render trucking company services.

In lieu of obtaining a business loan for the development of a new trucking company, many entrepreneurs will use specialty leasing programs instead of buying their trucks out right. In many cases, this can be beneficial given that there is no need to have a very large undertaking as a relates to the monthly pay down of a loan. However, leasing is very much akin to renting and very little equity in fact no equity is produced from the monthly payments that are made to a leasing company. When he be specific for a truck is undertaken, a interest rate is applied to the depreciation of the truck over a specific period of time. As such, it is wholly up to the entrepreneur to determine whether or not they want to build equity in a depreciable asset or if they want to simply maximize their profits and keep their balance sheets clean by leasing.

As time progresses, we are to continually add new information to this website as it relates specifically to financing for merchandise transportation and trucking businesses. As this is one of the largest industries in the United States, trucking companies generate in excess of $500 billion a year of revenue, this is one of the key topics that we’re going to discuss as many people have asked us for it.

Leave a Reply

Your email address will not be published. Required fields are marked *