Commercial Truck Financing

Benefits of Commercial Truck Financing

Ø  Lower Initial Costs: Financing reduces the need for large upfront capital outlays.

Ø  Cash Flow Management: Helps maintain cash flow by spreading costs over time.

Ø  Access to Up-to-Date Equipment: Allows you to upgrade to the latest equipment more frequently.

Ø  Tax Advantages: Lease payments may be tax-deductible as operational expenses.

Choosing the Right Financing Company for your company.

Typical Equipment Financing Terms no matter where you go:

Ø  Lease Term duration between 3 to 7 years.

Ø  Most will not finance used equipment over 10-year-old, some go older.

Ø  Equipment is not illegal or obsolete.

Ø  Down payment will be requiring up to 40% for most start-ups.

Ø  Down payment will be required for most low credit who are eligible to get an approval.

Ø  Monthly payments with very little upfront capital outlay are hard to come by unless you have been in business long enough with strong credit.

Ø  Interest rates ranges based on personal credit, equipment type, equipment age, whether you’re buying from a dealer or private seller.

Ø  End-of-lease options- lease to own is always $1.00 buyout, or Equipment Finance Agreement where there is no buyout. Some states require $101 buyouts.

Types of Financing and Leasing Options

1. Equipment Loans
   
   • Term Loans: Fixed-interest loans with set monthly payments over a predetermined period.
   • Lines of Credit: Flexible borrowing options where businesses can draw and repay as needed.
   • SBA Loans: Government-backed loans with favorable terms for small businesses.
2. Equipment Leasing
   
   • Operating Leases: Short-term leases with lower monthly payments and the option to return the equipment at the end of the lease term.
   • Capital Leases: Long-term leases that function similarly to loans, often with a buyout option at the end.
   • Fair Market Value (FMV) Leases: Leases with the option to purchase the equipment at fair market value at the end of the term.
3. Lease-to-Own Programs
   
   • Combines the benefits of leasing with the option to own the equipment at the end of the lease term, typically for a nominal fee.

Understanding Truck Lease Agreements

Reviewing the lease agreement carefully before signing is critical to make sure you’re not signing an FMV Lease when the salesperson says dollar buyout but the contract is actual FMV or Fair Market Value. Key components to check include:

Ø  Payment Terms: Understand the monthly payment amount and due dates.

Ø  Interim Rent: Is there an interim rent, which is rent in between the time of the next billing from the date of acceptance or lease commencement.

Ø  Maintenance and Repairs: Determine who is responsible for maintenance and repairs. Most equipment financing don’t apply unless warranty is added into the agreement and financing. If through the vendor, it will be through manufacturer warranty and services but not lender’s responsibility.

Ø  End-of-Lease Options: Know your options at the end of the lease, such as purchasing the equipment for a dollar or $101 for some state like FL, renewing the lease it has a balloon, or returning the equipment.

Ø  Early Termination: Be aware of any penalties for early termination of the lease. You may not pay any penalty for paying it early, but you’re still liable for the full term regardless of when you pay it off.

Ø  Advance Payment: First and Last, security deposit or down payment might be required. Check your equipment lease agreement to make sure you are aware of any money upfront to consummate the lease financing agreement.

Ø  Down Payment: Down payment reduces the amount financed.

Ø  Security Deposit: Security deposit is typically refundable unlike down payment.

Credit Requirements for Startup Financing:

For startup companies, we require: Credit requirements Varies. Here’s how you get your ducks in a row to make sure you make it easy for the lender approve you.

Ø  Business license or active business entity registration.

Ø  Personal guarantees from all owners – history matters.

Ø  Minimum 650+ credit score.

Ø  No bankruptcies in the last 7 years.

Ø  No unresolved tax liens.

Ø  No judgments, or repossessions

Ø  Sufficient networth

Budgeting for Commercial Truck Financing

v  Initial Costs: Some leases require a down payment, security deposit or initial fees like admin fees, first and last. Factor these into your budget.

v  Monthly Payments: Ensure your cash flow can comfortably cover the monthly lease payments. Does the equipment make money. Does it work all year round?

v  Additional Costs: Insurance, delivery, sales tax and other additional warranty or services that might be included in the equipment financing purchase. Operating capital to manage the equipment and the machinery.

Additional financing benefits you can qualify for to conserver working capital.

Ø  *$99 for the First 6 Months: Get started with minimal upfront costs for well qualified lessee.

Ø  90-Day Deferred Payments: Pay nothing for the first three months.

Ø  **if you get disqualified for equipment financing you might have an option for a Working Capital Loans: 

***Access short-term cash flow solutions for immediate cash need where your funds wired to your business bank account and you use it to purchase the equipment, leaving you a free and clear equipment. Working capital loans doesn’t specifically add the equipment into the UCC-1 Filing. Additionally, it doesn’t appear onto you personal credit.

Tips for Successful Commercial Truck Financing Experience

Ø  Plan Ahead: Start the financing process early to ensure all equipment is ready for your opening day. Provide credit and funding stipulations upfront. Don’t alter any documents. Get pre-approved early. Know you have the option to get financing.

Ø  Contact your equipment dealer: Get an invoice/quote for the lender to review and approved. Apply with your bank so you know whether they’re an option or not for a peace of mind. Alternatively, if you know you won’t qualify at your bank, contact Liberty Capital Group, Inc.

Ø  Vendor Approval: Each transaction a vendor must be approved. They want to make sure vendor is reputable who will deliver what you lease or purchase.

Ø  Equipment Approval: Every financing transaction, equipment must be approved. They need to make sure a restaurant is not buying a restaurant equipment. A restaurant can’t buy a backhoe. It doesn’t make sense.

Ø  Equipment must be business essential.

Ø  Negotiate: Don’t just negotiate with the vendor, you can also negotiate with the lender. Don’t be afraid to negotiate lease terms to get the best deal possible.

Ø  Consult Professionals Equipment Loan Broker: Work with a financial advisor or accountant to understand the financial implications of financing. They’re the best source for information on how you can maximize your financing options.

Equipment financing can be a strategic move for any business owner, providing flexibility and preserving working capital is a good cashflow management strategy.

By understanding the equipment financing process and carefully selecting your equipment and financing partner, you can set your business up for success faster, rather than waiting for cash to come by.  Don’t let opportunity hold you back due to lack of capital. You have funding options with Liberty Capital. Contact us today. We’re ready to help your business grow and elevate to the next level. Best of luck! Liberty is your Freedom!

Bank Hopping for Commercial Truck Loans: Why It’s Time-Consuming and How Liberty Capital Can Help.

Searching for the right equipment lender especially if you’ve already been turned down by your bank, by hopping from one bank to another just trying to figure out whether they will approval you can be a time-consuming and frustrating process, especially if you have challenging credit. Each application involves time-consuming paperwork and potential rejections. If you get turned down, how many more lenders will you apply to before seeking better options from a loan broker?

Why Liberty Capital?

Special Financing programs

Ø  $0 Down for qualified lessee

Ø  1 Advance Payment

Ø  90-day deferred payment

Ø  $1 buyout, no prepayment penalty

Ø  Monthly payment up to 5 years

Ø  Equipment finance Agreement

Ø  Low Admin and doc fee

Ø  $99 for first 6 months

Working with an equipment loan broker like Liberty Capital can streamline the process, saving you both time and money. Brokers have access to multiple lenders that can structure any credit profile specific to you, even if your credit is less than perfect. With their expertise and network, brokers can navigate the complexities of loan applications and increase your chances of approval. You may not know all the intricacies of equipment financing thus a loan broker will be able to help you navigate.

So why go through the hassle of bank hopping when Liberty Capital can do the work for you, ensuring you get the best possible deal?

When it comes to equipment financing, Liberty Capital Group, Inc. offers several advantages over traditional lenders:

Ø  Corp-Only Availability: We cater exclusively to corporations, providing tailored financing solutions for businesses. Corp-only doesn’t apply to start ups. Corp-only doesn’t substitute for having bad credit. Corp-only doesn’t automatically apply because your company is corporation or LLC.

Ø  Up to 120% Equipment Cost Coverage: Our financing options can cover not only the equipment cost but also associated soft costs.

Ø  Flexible Funding Amounts: Access financing ranging from $250,000 with a simple one-page application to $5,000,000 with full financial statements.

Ø  Quick Approval Process: Benefit from next day funding approval, ensuring minimal downtime for your operations.

Ø  Approved Equipment Vendors: We work with approved packaging equipment vendors, streamlining the acquisition process for our clients.

Ø  Lowest Industry Rates: Enjoy competitive rates for qualified borrowers, reducing the overall cost of financing.

Ø  Eligibility for New and Used Equipment Financing: Whether you’re purchasing new or used equipment, we’ve got you covered.

Ø  Minimal Impact on Personal Credit: Our equipment financing solutions do not appear on personal credit reports, preserving your personal credit history.

Ø  No Early Payoff Penalties: Enjoy the flexibility of paying off your equipment financing or leasing early without incurring early payoff penalties.

Are you an Equipment Vendor??

If you sell new or used trucks, trailers or machinery including medical equipment, we’d love to partner with you to offer highest approval rate for your clients. Our goal is to get them approved no matter what their credit profile might be. Working with Liberty Capital will give you a wider credit window so you can stop shopping for your clients. We do soft-inquiry for each applicant.

1.     Check out how you can grow your vendor business using our financing options. View our credit guidelines here.

2.     Download our equipment vendor package here.

All we need from your clients is a simple application.

1.     ONLINE APPLICATION: You can fill out our application, upload and authorized us to process your application. We do soft-inquiry, and our lender will do hard inquiries once you are approved for Equipment Financing only.

2.     Equipment Invoice or Quote for the truck or equipment you want to buy. Multiple vendors accepted. We’ll lump them into one monthly payment for you. We’ll accept bill-of-sale for some private sale.

3.     Banks statements (3-4 months) – Proof income, proof of banking, and proof funds availability in case down payment is needed and to match for ACH Payment Drafting – as an auto pay.