Truck Financing Options Have Tightened Requiring Credit Strategy

[Johnny Martinez]

The traditional financing of trucks poses significant issues due to the economic challenges facing both independent and commercial truck operators. Diesel fuel prices have reached record levels that are $4.50 plus, or even more. this impacts the profitability of trucks more as any other expenditure. The increase in food prices creates further instability in the market and defaults across the industry have led to banks becoming more skeptical of truck financing. Kenworth is a Kenworth brand, which makes famous heavy-duty trucks for industrial use, has tightened its internal financing approvals more than the overall lending market. Kenworth financing was difficult to get at the most favorable times and the current conditions in the market make the process nearly impossible. Kenworth has pulled money and made substantial down payments that range from 10 to 30 percent.

Long haul trucks must meet the most stringent requirements for financing. Businesses that are starting out must make substantial down payments as well as have excellent credit in order to be eligible. Established trucking companies with bad credit may require 10% to 20% down. Entrepreneurs in the trucking industry can increase their chances of getting approval with any bank by getting the best deal. Auctions, repossessions, off-lease trucks and private sellers could provide substantial rewards and risk that can help a deal be more appealing to lenders. Truckers are susceptible to credit denials because of a myriad of factors, such as insufficient payments, tax problems or financial records that are poor or getting low FICO scores, which evaluate the creditworthiness of an individual. more about Commercial Truck Financing & Leasing

Insufficient credit does not mean that it is ineligible the owner from the possibility of financing. The use of collateral for personal or business purposes can secure the sale, which can lead to loans that are approved. The collateral added to loans allows lenders to bypass criteria for credit scores when making decisions. Heavy equipment or fully owned trucks and/or residence real estate as well as co-signers may aid in approvals. The collateral for equipment that is offered outright could facilitate approvals in just one week. Real estate may require up to two weeks to clear title. Lease and purchase programs provide tax advantages, and this could be able to gain acceptance faster.

Whatever method truckers decide to use, they must have adequate insurance coverage in order to safeguard their assets as well as their livelihood. A full purchase-price insurance policy can provide security, while accidents and health insurance can protect truckers from events that are beyond their control. Physical damage insurance as well as other options provide full protection against any possibility. Off leases and repossessions allow trucks to be purchased at attractive rates for new buyers or established owners looking to expand their operations. This includes loans that are strict through the company's internal Kenworth finance department. There are financing options for trucks available to those who wish to research and explore all options.

This author spent great deal of time studying Truck Financing and other related issues. Find out more information on Kenworth Financing at the author's Commercial Lending USA