Best Guide to Tow Truck Financing
What is Tow Truck Financing?
Tow truck financing involves obtaining funds to purchase a tow truck through various leasing, equipment loans, dollar buyout leases, or equipment financing. Tow trucks are specialized vehicles equipped with hydraulic arms, and tow for handling heavy duty hauling and flatbed tow trucks for bulk materials like logs, waste, and debris.
Financing Options
v Tow Truck Loans: Traditional bank or lender loans provide a lump sum to buy the truck, repaid over a fixed term with interest. They can be secured (using the truck as collateral) or unsecured.
v Tow Truck Leases: Leasing allows the use of the truck for a set period with regular payments. Options at the end of the lease term may include purchasing the truck, renewing the lease, or returning the truck.
v Wrecker Equipment Financing: Specifically designed for purchasing equipment, these loans often offer favorable terms as the new or used wrecker truck itself serves as collateral.
v Lines of Credit: Flexible access to funds that can be drawn upon as needed, useful for ongoing expenses related to the truck.
Qualifications for Tow Truck Financing
v Lenders consider several factors when approving financing new or used tow truck, wrecker, and flatbed trucks.
v Credit Score: Higher credit scores generally secure better interest rates and terms.
v Business Financials: Lenders review the business’s financial health, including revenue, profits, and cash flow.
v Down Payment: A substantial down payment can improve approval chances and reduce overall financing costs.
v Collateral: The tow truck itself typically serves as collateral, though additional assets may be required for larger loans.
Steps to Securing Tow Truck Financing
v Assess Needs: Determine the specific type and size of tow truck needed.
v Check Credit: Ensure a good credit score and address any issues.
v Gather Documents: Prepare financial documents such as tax returns, financial statements, and business plans.
v Compare Lenders: Shop around to compare terms, interest rates, and conditions.
v Apply for Financing: Complete the application with the chosen lender, providing all required documentation.
v Review Offers: Carefully evaluate financing offers considering total costs, repayment terms, and flexibility.
v Finalize the Deal: Once approved, finalize terms, sign the agreement, and acquire the tow truck.
Ask About Our Financing Promotion:
Liberty Capital accommodates clients with to financing options that will yield very little working capital outlay.
Here’s our current promotion to save on cashflow.
- $99 for the first 6 months: Requires only $99 to start
- 90-day Deferred Payments
- $0 Down Equipment Financing
What you get when you finance equipment with Liberty Capital.
Any equipment financing solutions typically will involve two primary options:
Tow Truck Financing: This option will provide you lenders like national banks, private lenders and vendor dealer lenders who can offer you businesses equipment financing. These types of financing allow businesses to spread the cost of the equipment over time, making it more manageable to afford with equipment financing.
Tow Truck Leasing: This second option is leasing it. Leasing involves off-balance sheet financing in the form of Fair Market Value (FMV). During the lease term, the business pays regular payments to the leasing company. Payments is deducted 100%. At the end of the lease term, the business may have the option to purchase the equipment based on current fair market value. Or, return the equipment, or negotiate a new lease agreement for upgraded equipment.
Both financing and leasing options offer benefits such as preserving cash flow, avoiding large upfront costs, and providing flexibility in of consistently having an updated equipment. Additionally, financing and leasing solutions may include all soft-costs into the agreement like maintenance, installation, delivery and service agreements, furthering, your cashflow savings. It’s an inflation buster strategy.
Overall, equipment financing and leasing solutions from Liberty Capital Group, Inc. will enable you to have the right funding partner. Liberty Capital Group, Inc. has served small businesses for over 20 years.
Startup Equipment Financing for Towing Business
For startups, having reliable equipment is crucial. With Liberty Capital, you can acquire top-notch gear through affordable, fixed monthly payments, preserving your working capital for growth essentials.
Our Tow Truck Financing for Startups can get your business off the ground running. These are the typical financing advantages when it comes to tow truck financing:
· Up to 100% purchase financing
· Up to $150,000 with a straightforward application, or
· Commercial Loans up to $3,000,000 with financial disclosure
· Next-day funding, with pre-funding options available for towing equipment vendors
· Fixed payment terms spanning 12 to 60 months.
· No down payment requirements for qualified borrowers
· Lowest rates in the industry for qualified borrowers
· Eligibility for all new and used equipment purchases, without impacting personal credit reports.
· Minimum FICO: 650 for starts at a pre-revenue level. Once you have revenue, there might be better chance for those with less than 650 credit.
Therefore, tow truck equipment financing has many benefits. It will save your business cashflow by financing depreciating assets. Avoid obsolescence and inflation buster. Don’t forget it builds asset for the business while benefiting from tax deductibility under IRS section 179 of these types of purchase. these types of equipment can be too expensive to buy, and anyway, they depreciate so fast.
Equipment Leasing is the best way to go about it conserves cash and protecting from obsolescence. The best thing about Tow Truck Leasing is that you also enjoy tax benefits and the low monthly payment it affords you, same as the person that buys the equipment, most of these transactions will not appear on personal credit since it’s a business loan.
Whether you decide to lease, borrow, or buy out right, you will find yourself in need to finance your next new or used tow truck, equipment leasing and financing is more easily accessible through your trusted funding source Like Liberty Capital. Cashflow is King once it’s paid you can’t cash out of business equipment. Fixed asset should not be paid with liquid cash. Liberty Capital understands that it’s not just equipment financing it’s all about the cashflow.
Equipment Financing and Leasing For Tow Trucks
Off balance sheet financing - Fair Market Value, 10% FMV
Capital Lease - $1 buyouts
Equipment Finance Agreement
Lease Rental Purchase Option (RPO)
Tips for Successful Financing for Tow Trucks
- Improve Credit: Work on improving your credit score before applying.
- Negotiate Terms: Negotiate interest rates and terms with lenders.
- Consider Future Needs: Choose a financing option that allows flexibility for future upgrades or additional equipment.
- Consult Professionals: Seek advice from financial advisors or brokers who specialize in equipment financing.
Benefits of Financing a Tow Truck
- Preserve Capital: Financing helps preserve working capital for other business needs.
- Fixed Payments: Predictable monthly payments aid in budgeting and cash flow management.
- Tax Advantages: Potential tax deductions on interest or depreciation, depending on the financing structure.
- Immediate Use: Financing enables immediate use of the truck, benefiting business operations right away.
What do I need to apply?
Ø ONLINE APPLICATION: You can fill out our application, upload and authorized us to process. We do soft-inquiry, and our lender will do hard inquiries once you are approved.
Ø Equipment Invoice or Quote for the equipment you want to buy. Multiple vendors accepted. We’ll lump them into one monthly payment for you.
Ø Banks statements (3-4 months)
Once we have your application, your funding advisor will reach out to discuss the process, timeline, and expectations. We’ll then make an offer and if accepted, we’ll reach out to the vendor for payment instruction. We can pre-fund any vendor up to 100%. We can do used equipment up to 60 months.
At Liberty Capital Group, Inc, we’ve been serving small business for over 20 years. Apply today!