Dump trucks are essential equipment in the transportation and construction industries, but they are expensive. It is almost impossible to acquire this machinery without affecting your cash flow. There are some expenses that come with buying a dump truck such as maintenance and insurance fees. So if you think of it, it is not a smart move to pay for one even if you can afford it.
The good thing is you can try dump truck financing. It is quite simple: get the dump truck and pay for it over time. While this sounds simple, lenders may have strict criteria that may make the whole process tedious. With Inspired Funding, you can get funded in no time and get the best payment conditions.
New to truck financing? This article provides everything you need to know and how to get started.
HOW TO FINANCE DUMP TRUCKS
Financing is a great way to pay for a dump truck without going bankrupt. There are many alternatives, and we explain them all in this section.
TRUCK LOANS
You can always use truck loans to finance your dump truck. It works the same way with every other loan: the lender provides you with funds and you repay over an agreed-upon period with interest. While this sounds easy, remember that dump trucks are expensive. The lender has to be sure that you can pay back the loan and will need to see your credit score to ascertain that. Most lenders will require a decent FICO score, usually ranging from 640 and above.
In cases where you don’t have the required credit score, then having over 3 years in business with an ideal cash flow can save the day. These are the basic things you should know about dump truck loans:
- The dump truck serves as collateral.
- A good credit score and financial history will give you a good chance.
- Loan terms vary depending on the lender.
LEASING
Businesses opt for dump truck leasing for short-term projects, which can span from 2-5 years. It’s like rent, but often lasts longer than a rental agreement. To get a lease, you make a down payment, then pay a sum with interest monthly over the lease period.
At the end of the lease, you can return the truck, renew the lease or opt for a lease-to-own option. Here are some benefits of a dump truck lease:
- No minimum FICO-score
- Lower monthly payment compared to the loan option.
- Flexible payment structure.
EQUIPMENT FINANCING AGREEMENTS
Equipment financing agreements (EFA) are short-term loans designed for financing equipment. It comes with a couple of benefits and can be a smart move if you want to keep your business in motion without worrying about money.
A major advantage of this loan type is the ability to preserve your working capital while you spread the payment over time. Other benefits of EFAs include:
- Flexible repayment terms
- Tax benefits, as loans are deducted as expenses
- You own the truck after you pay off the loan.
- The truck serves as collateral
SPECIALTY LENDERS
There are also specialty lenders that concentrate primarily on financing different types of trucks. They have a deep understanding of the truck industry and can provide customized options for different truck buyers like we do at Inspired Funding. Credit score is not a barrier, instead, we provide a seamless process, assisting all the way.
Once you have completed the application and reviewed the funding approval with our finance, you can go ahead to submit the necessary documents and get funded.
REQUIREMENTS FOR GETTING A DUMP TRUCK FINANCING
There are basic things a lender will look out for before financing a dump truck. These are your credit score, how long you’ve been in business, and down payment. Let’s break these down so you can understand:
CREDIT SCORE
The best way a lender can be assured you will repay your debt is by confirming you have a good credit score. We usually recommend having a score of at least 640 to get great interest rates and repayment plans. Anything lower than that result in unfavorable loan conditions.
TIME IN BUSINESS
How long you have been in business is also a factor that most lenders consider. People with three years of experience in business will stand a good chance. But this doesn’t mean new business will be pushed aside. A good credit score can make up for your lack of business history.
DOWN PAYMENT
Lenders will demand a down payment. Some can ask for a reasonable percentage, while others can ask for as high as 50%. This is often dependent on whether you met the requirements above.
HOW TO GET DUMP TRUCK FINANCING
People get approved for dump trucks every day. It is all a matter of planning and knowing the right steps to take. Here are some processes you should consider:
ASSESS YOUR FINANCIAL HEALTH
Your first step should be to review your credit score and financials before applying. A strong financial profile will give you a higher chance of getting approved for better loan terms.
RESEARCH FINANCING OPTIONS
Good research ensures that you choose the best financing that works for your situation. So make sure you invest some time into it.
PREPARE YOUR DOCUMENTATION
Once you have found the right financing options, compile your necessary documents, start preparing your documents. Some of the documents you need to provide include:
- Truck details like its price
- Financial and business record
- Annual mileage on the truck, among others
APPLY FOR THE DUMP TRUCK FINANCING
After your research. It is time to apply! Whether you are choosing banks, online lenders or truck loan financiers, begin the application process and submit the necessary documents already listed above. Seek help when necessary with the applications and read every document carefully before signing.
GET FUNDED
To get funded, you will go through some stages such as the determination which sets out the loan conditions like the interests, repayment period, and others. Once this is done, you can finalize your paperwork and get funded!
GETTING DUMP TRUCK FINANCING WITH BAD CREDIT
Having bad credit does not mean the end of the road for you. You can still get dump truck financing. Typically, lenders will want a high down payment. You can improve your chances of getting dump truck financing with the following:
- Co-signer with good credit
- Lengthy-time in business
- Good cash flow
These are not set in stone and conditions may vary for every lender.
BENEFITS OF DUMP TRUCK FINANCING WITH INSPIRED FUNDING
Dump truck financing allows you to acquire a vehicle while preserving your cash flow. With the right financing partner, you can expand your fleet and grow multiple streams of revenue.
Inspired Funding has helped hundreds of businesses get the best dump truck financing. We guide you to finding the right truck and help you with the application process from start to finish.
Also, enjoy benefits like low down payments on used dump trucks and no minimum FICO score on leased trucks. Give us a call today to start your dump truck financing journey.
