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Many people reach a point in their driving career when they don't want to work for anyone else anymore. They want to take their career into their own hands by starting their own trucking business. Owning a truck is an important step to take early on in this venture, but most people don't have the cash on hand to buy it outright. That's where semi truck financing comes in.
If you're thinking of applying for semi truck financing, here are some steps you can take to increase your chances of getting a good rate when you apply:
Like other loans, your personal credit score will be taken into consideration when you apply for semi truck financing. Here's some good news, though. Unlike other types of business loans, your semi truck serves as collateral when you take out a loan, so you might still be able to get financing even if your credit falls under the ranking of "fair" or, in some cases, "poor."
Improving your credit score can take some time, but doing so will improve your financial options in other areas of your life. Some ways to do that include:
In order to finance a semi truck, you need to demonstrate that you own your business. It's relatively simple to register as an LLC or Sole Proprietorship. Read up about applying as a new business on the Small Business Association (SBA) website.
The amount of cash you put down will have a major impact on how much money you pay each month. The bigger the down payment, the lower your monthly payments.
Work on saving for the next few months, or even longer, to have as much cash to put down as possible while still having 1-2 months of cash reserves saved up to cover things like repairs, breakdowns and other incidental expenses. Financing companies like to know that you have options in case business is slow for the first month or two you're in operation.
Financing a truck can be a great way to work for yourself. Take these steps to improve your credit, register your business and save up for a down payment with some left over for cash reserves before applying for financing.
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