Guide to Truck Loans

What Trucking Business Owners Should Know About Truck Loans

A businessman in a hardhat standing next to his new truck as he signs on a clipboard.

The trucking industry in the United States is a huge business, with an incredible 80% of all cargo in America transported by trucks. In order to compete with larger companies, small trucking business owners and operators often need reliable access to credit in a hurry to help them buy trucks and equipment, handle start-up costs, and miscellaneous cash flow gaps. Truck loans are a popular way for business owners to handle these and other cash flow challenges.

In this in-depth guide, we’ll discuss how truck loans work, examples of how business owners can use truck loans, the pros and cons of getting a truck loan, and some alternatives to consider for financing your trucking business.

Ready to learn everything you ever wanted to know about truck loans? Let’s go!

What is a Truck Loan?

A truck loan is a financial product that allows you to purchase a truck, car, van, or other commercial vehicle for your business. Typically, borrowers seek truck loans from their automobile dealer or a major bank.

The most common use for a truck loan is purchasing or refinancing the purchase of a commercial vehicle. However, there are several other ways that small business owners use truck financing, some of which we’ll discuss below.

Owning and maintaining a truck (or a fleet of them), along with all the other overhead expenses for running a small business, can easily leave you wishing for additional funds. If you are a small business owner who works with trucks, cars, and haulers on regular basis, then truck financing in the form of a truck loan or semi-truck loan might be just what you need.

Why do small business owners need truck financing?

Trucking is a thriving industry. As long as there are goods to be delivered, there will be a need for the trucking business.

Although there is lots of money to be made in the trucking business, it is an expensive business to run. One reason for this is that good employees are difficult to find and keep. Truck driving is a demanding, time-consuming job, and the drivers are often expected to stay away from home for long periods of time. Employers must offer their employees competitive benefits and compensation in order to earn their loyalty.

If you are running a small trucking business, then just making payroll can become a huge issue. This is just one example of why a small business owner may turn to truck loans.

Here are some more examples of issues that can be resolved by using truck loan funding:

  1. Maintenance: Without trucks, your trucking business would have no customers. All vehicles need maintenance on a regular basis. As an owner, you need to handle tire changes, oil changes, maintaining the engines on a regular schedule to keep your fleet running smoothly. Trucking business owners often finance these expenses with truck loans.
  2. Purchasing spare parts: Related to all that maintenance, sometimes even a well-cared-for truck will need replacement parts. Business owners can use trucking loans to buy spare parts for their vehicles as well as other necessary equipment.
  3. Salaries: The only thing as important as trucks to a trucking company owner are the employees who maintain and drive them. With access to extra funding, entrepreneurs can rest easier knowing that they will may payroll on time, and can consider hiring more employees to handle a quick uptick in business. You don’t have to wait for invoices to be paid before paying your employees. Truck loans can be used to pay salaries.
  4. Day to day expenses: You can pay everyday operating expenses using funds from truck loans. This can include fueling vehicles or paying for tolls during long journeys. According to Business Insider, over 143 billion dollars are spent annually on fuel alone!
  5. Taxes and license fees: You can’t run a legal trucking business without getting the required licenses and paying taxes. For example, in order to operate heavy commercial vehicles, all of your company’s drivers will need commercial driver’s licenses (CDLs). These require an extensive background check, written exams and driving tests, as well as fees. (Look to your local Department of Motor Vehicles (DMV) for details.) You’ll also need to get your Federal DOT and Motor Carrier Authority numbers, which are used to track your business safety and compliance records. To get these, you must complete registration and application processes through the Federal Motor Carrier Safety Administration (FMCSA). These are just a few of the licensing requirements you’ll encounter in your trucking business. Truck loans can help owners cover these expenses and more.

Types of Financing

There are different types of loans available in the market for entrepreneurs to expand their trucking business. Here are some of the most common options:

  1. Invoice Factoring: Through invoice factoring, you, as the borrower, can convert unpaid invoices into cash by selling them to a factoring company. The factoring company charges a percentage of the invoice amount, and gives you the rest up front. You can then decide how you want to use the money.. In the case of invoice factoring, the lender takes on all of the accounts receivable duties, including collecting directly from your customers.
  2. Working capital: Working capital loans enable you to have immediate access to cash. In return, you agree to give a percentage of your future monthly revenue to the lender. The amount of cash you get depends on the amount of monthly revenue your business generates. Although this type of loan is secure and you get access to the money right away, many small businesses won’t qualify for this type of financing for a number of reasons. For example, very new businesses which do not generate much revenue yet will not be able to get approved for working capital loans.
  3. Traditional term loans from a bank: Term loans are a popular type of financial product that gives the borrower access to a lump sum on which the borrower must pay interest on the entire amount after receiving the funds. It’s difficult for trucking businesses to get this type of loan. Banks prefer to make loans that they perceive as being lower in risk. The application process for a term loan is lengthy and thorough, and unless your business is well-established with a solid credit history, and you can prove you have high personal credit, chances are high that a bank will not approve your request.
  4. Alternative options: Other options for truck loans include online financing companies. There are many online companies that provide truck loans to small business owners. Reading fine print is no fun, but you should be careful to read and understand their terms and policies. Most online lenders require evidence of a solid credit history, or collateral for their service. Choose a company that best meets your requirements and then apply for the loan online.

Pros of financing with truck loans

Getting approved for truck loans can benefit small business owners in a number of ways, including these:

  • Financial flexibility – Business owners can access extra cash flow to cover any unforeseen expenses that their business might face. Entrepreneurs can use these extra funds to handle business-related expenses like purchasing equipment, maintaining vehicles or even paying employees or filing taxes. This flexibility comes with any type of additional funds, not just truck loans!
  • Ownership -Truck loans make financially more sense than leasing or renting a truck since at the end of your loan duration, you will get to keep the vehicle.
  • Growth of the business – With extra funds, business owners can focus on driving business growth instead of feeling bogged down by daily emergencies. This improved financial runway can enable the business owners to plan for future expansion.

Cons of financing with truck loans

Business owners should consider the following downsides when it comes to financing with truck loans:

  • Collateral– As with most types of financing, most lenders will look for collateral before approving a truck loan for a small business. The need for collateral is not unique to truck loans, and can come in various forms. For example, you can use a new or existing vehicle (like a car, truck or boat) to help you get financing for another vehicle. Stock or equity in property that you own are other acceptable forms of collateral. Talk to your financier about which types of collateral they will accept.
  • High-interest rates – due to the risks involved in a trucking business, many lenders have high-interest policies with which business owners have to comply.
  • Credit history – most lenders would look at the credit history of the business as well as the personal credit of the borrower before approving the loan; which, if you have poor credit, makes getting a loan approved very hard.

Who qualifies for truck loans?

To find out whether you qualify for a truck loan or not, you’ll need to provide the lender with information including:

  1. Age of your business: The longer you have been running your business, the higher the chances are for you to get approved for the loan you seek. Most lenders look for applicants that have been in business for at least a year.
  2. Solid revenues: If your business can generate solid and steady revenues, and you can prove it to the lender, then it is more likely that you will get the loans you need.
  3. Personal credit score: A high personal credit score will help you get a loan with a low-interest rate.

What is Fundbox and How Can it Help?

At Fundbox, we provide small businesses with access to credit, based on the information in their business bank account or accounting software. Fundbox connects entrepreneurs with the capital needed for the growth of their business. We believe in providing opportunities to small businesses by helping approved business owners get access to funds with transparent, flat fees.

Business owners can apply for Fundbox Credit online. The application process is straightforward and simple to understand: you can sign up in seconds to see if you qualify. The approval process usually takes about an hour. Once approved for Fundbox Credit, you can get access to the money as soon as the next business day. Fundbox has already helped thousands of small business owners, including trucking and distribution company owners.

Why and How to Apply for Fundbox Credit

Why apply for Fundbox? We like to let our reviews speak for us.

Before applying anywhere for any type of funding, you’ll want to do some research. A top concern for any business owner is whether the lender you’re considering is trustworthy and reliable, or not. Online reviews and ratings are one important metric for determining the trustworthiness of a lender or alternative financing company. With a TrustScore of 9.7 out of 10 and an overall rating of “Excellent” on TrustPilot, Fundbox is company relied upon by 70,000 customers. We’re proud of the reviews left by our many satisfied customers.

To apply for business credit with Fundbox, follow these simple steps:

  1. Register online with Fundbox and provide your personal as well as business details.
  2. Choose to connect your accounting software and bank account or just your bank account by itself. We use this information to analyze your business performance.
  3. Our software reviews your business’s history of transactions to determine whether you qualify for funding.
  4. You’ll receive a credit decision in just hours.

Benefits of Using Fundbox

Here are a few of the things that make Fundbox one of the best options for small business owners looking for truck financing:

  • Fast-paced process – Applying for credit through Fundbox is a quick and transparent process. You get a credit decision in hours. If you’re approved, you can draw funds and they’ll arrive in your bank account as soon as the next business day.
  • Repaying is convenient – Once your loan is approved, you have 12 to 24 weeks to repay the funds. If you choose to pay off the debt earlier than your chosen time frame, your remaining fees are waived, saving you money. This is a big contrast to more conventional loans, where fees are front-loaded, meaning you pay most or all of your fees up-front.
  • No registration fee – There is no registration fee with Fundbox. You only pay a fee when you draw.


As a trucking business owner, we know you have a lot of reasons to want convenient, reliable access to extra capital. From buying and maintaining trucks and equipment, to making payroll every month, there’s always a place for extra cash. You also have many factors to consider when deciding how to best meet your cash flow needs.

If you’re still considering your financing options, wondering if truck loans are the best choice for you, or want to know more about how alternative financing options like Fundbox could work for you, we’re here to help.

Wondering how much funding you might be able to get with Fundbox? Apply for Fundbox today, and you can expect a credit decision in under 3 minutes*.

*Decision under three minutes based on the median decision time for Fundbox customers.