A GUIDE TO COMMERCIAL TRUCK REPAIR LOAN: KEEPING YOUR FLEET ON THE ROAD

Congratulations you have found the best financing for your commercial truck, and you are now in business. Your business brings in a reasonable profit that you use to service your loan and pay yourself a fair income for your hustle. But what happens when your vehicle breaks down or needs quality servicing to keep running efficiently?

Maintaining vehicles is expensive, and for heavy vehicles like trucks, you might have to consider having some cash to fall back on when the need arises. The great thing is you can always opt for truck repair loan to cover recurring and unexpected maintenance costs. These are loans you take specifically for the purpose of fixing your truck, and keeping them on the road.  

Eager to learn more about these loans? Then keep reading as we uncover all that you need to know. 

WHAT IS A TRUCK REPAIR LOAN?

A truck repair loan is the kind of financing obtained to fix trucks. For commercial vehicles that run on a day-to-day basis, maintenance and little fixes are inevitable to ensure they are in great shape and do not break down. But being heavy-duty machinery, maintaining trucks can be expensive, which makes getting a loan a wise option, whether you run a fleet or are an independent operator. 

BENEFITS OF GETTING A TRUCK REPAIR LOAN

Opting for a repair loan has a couple of advantages and some of them are the following:

  • Quick access to funds: The need for repairs can sometimes be unplanned. Repair loans ensure that you can access the necessary funds needed even in urgent situations. 
  • Keeps business running: A day off the road means loss of income. And the more time you spend off can lead to loss of clients and business. By getting access to funds, you can get back to work and keep generating consistent income. 
  • Flexible payment options: Instead of covering the cost of maintenance outright and possibly impacting your cash inflow and reserves, repair loans ensure that you fix your vehicle while spreading your payments over some time. 
  • Helps build credit: Timely payment of loans equals a boost in your credit score, which improves your chances of getting future loans. 
  • Enhance truck value: A repair loan can help you get the best part replacements and maintenance. This will help reduce breakdowns and extend the life of your vehicle. 

HOW MUCH DO TRUCK REPAIRS COST?

Recent findings show that the current size of the truck repair market in the US is $18.4bn. This means that a lot of money goes into maintenance yearly. Yet, the amount you pay to fix a truck often depends on the gravity of the wear and the rate of the service provider. 

There are a lot of factors to consider. For example, you could be required to replace parts like the engine, battery, or steering. In other cases, the age and condition of the vehicle can be determining factors. If you drive one of the best truck brands, you can expect to cut down on maintenance costs, but on average, repairs can cost as much as $15,000 per annum minus tire replacement costs. 

WHAT ARE THE TYPES OF LOANS FOR TRUCK REPAIR?

Looking for financing options to fix your truck? The good news is that there are numerous choices out there, and you will be spoilt for options. You can also go for a personal loan, equipment financing, or factoring. More importantly, you can find a solution that fits your needs and budget.

COMMERCIAL VEHICLE TITLE LOANS

When you obtain a commercial vehicle title loan, you use your truck title as collateral. It is a fast financing option that is ideal for financing repairs. However, using your title as collateral means that you may risk losing your truck if you miss payments as the lender keeps the title until you fully repay the loan. 

Key things to note for this type of repair loan are that loan terms and high rates are highly dependent on the value of your vehicle. So if you’ve got great credit, opt for it but remember to stick to the repayment plan to avoid losing your vehicle.

EQUIPMENT FINANCING OPTIONS

Equipment financing loans provide you with the financing you need to purchase or fix your truck if it has enough equity to serve as collateral. What this means is that your equity has to be higher than the amount needed for repair. 

Your equity is the liquidation value of your equipment less the outstanding loan amount, while the cost of repair is the total estimated cost of repair that you need for an equipment financier. 

Remember: Equity in Equipment ≥ Cost of Repairs. In essence, equipment works for vehicles that have significant equity. If your truck does not fall into these categories, then you can try other options. 

REFINANCING

If your truck is already financed, then you should consider the refinancing option. It works by replacing your current loan with a new one which you can now use to fix your vehicle. 

If you are consistent in paying your former loan, then you can get better terms such as reduced monthly payments, lower interest rates, and extended repayment periods. The benefits of refinancing include an improved cash flow and great savings opportunities as you now have smaller payments to make. 

COMMERCIAL VEHICLE REPAIR LOANS

Commercial vehicle repair loans are designed to help vehicle owners to cover the costs of repairs. Generally, they are easier to get if you go through servicing facilities or lenders who offer tailored loans for truck owners. 

SMALL BUSINESS TERM LOANS

Another financing option you can explore is the small business term loan which allows you to borrow a lump sum of money and repay it in regular installments over a set period. 

These loans can be ideal for larger expenses like truck maintenance because they spread the payments over time, making them more manageable with less financial strain. Here are other things you should know about small business term loans: 

  • You can usually borrow up to two times your monthly business revenue.
  • Credit history and financial health are vital requirements in securing this loan and they determine loan terms, like interest rate and repayment period.
  • The interest is tax-deductible, offering a financial benefit.

BUSINESS CASH ADVANCES

Also called Merchant Cash Advance, or (MCA), business cash advances can give quick funds to help you sort out your repairs while repayment is deducted over a while from your future cash flow. MCAs provide immediate relief, but they often come with high interest rates deducted daily, weekly or monthly. 

FACTORING

You can count on the services of a factoring company to help you raise the needed funds for truck maintenance. All you need to do is sell your unpaid invoices to a factoring company instead of waiting for your customers to pay. The factoring company will give you most of the money upfront and charge a fee for their service.

For example, if you have unpaid invoices worth $50,000, a factoring company can pay you a portion of that right away. Once the customer pays, the factoring company keeps their fee and gives you the rest.

Note that factoring can be expensive especially when you calculate the cost over a period of time and it doesn’t build business credit. 

REQUIREMENTS FOR SECURING TRUCK REPAIR LOANS

Just like regular business loans, you’ll need to provide documentation to prove your ability to repay the loan. Below is a list of the basic requirements a lender will need from you before granting you a loan:

  • Personal details
  • Valid business information
  • Credit history
  • Business financial document
  • Document showing vehicle details and current condition
  • Proof of insurance
  • Proof of truck ownership
  • Collateral (in most cases, the truck)
  • Down payment

HOW TO APPLY FOR  LOAN FOR TRUCK REPAIR LOAN

With adequate preparation, you can get the best repair financing and fast-track your approval rate. Here is how you can do that: 

  • Check your credit score: Ideally, the higher your credit score, the better your chances of getting approved for a loan and securing better terms and interests
  • Prepare your financial statements: Lenders will check your business’s financial health so prepare relevant documents like bank statements, tax returns, proof of income, and every other important financial record. 
  • Compare lenders: From the different types of financing options explored, it’s obvious that they all have different terms. Instead of sticking with the first one you find, compare their conditions and rates to find the best one that works for you. 
  • Look out for specialized lenders: Specialized lenders access your unique financial situation different from traditional banks to provide tailored loan solutions. They can be your best bet if you need a truck repair loan with bad credit.
  • Ask about hidden fees:  Clarify all fees and charges, including prepayment penalties or late fees, to avoid surprises later.

HOW TO SECURE THE BEST COMMERCIAL TRUCK REPAIR LOAN WITH INSPIRED FUNDING

Repairs are unavoidable expenses. And if you run a fleet, it is best to always be prepared for the unexpected. So don’t feel bad when your vehicle needs a quick fix after all the hard work, instead focus on partnering with a reliable financial expert like Inspired Funding. At Inspired Funding, we make securing your truck repair loan as seamless as possible so that you can get back to business quickly.

ABOUT INSPIRED FUNDING

Inspired Funding has helped hundreds of truck companies secure the vehicles they need to succeed. Whether you’re expanding your fleet, starting a new business, or navigating bad credit, we’re here to make financing simple and stress-free. 

We specialize in truck financing designed to get your business on the road to success. From box trucks and dump trucks to cargo vans, semi-trucks, and other vocational vehicles, our process is easy. Get guaranteed low payment on used trucks and no hard pulls on credit scores. 

With competitive interest rates, flexible down payments, and manageable repayment plans, you can focus on growing your business without the stress. Start your journey to funding today!