If you run a commercial operation that requires heavy lifting, a commercial vehicle can help. You might think that purchasing a commercial vehicle is handled in the same way as purchasing a personal vehicle, but a few other factors fall into the process. Learn more about purchasing a commercial vehicle and how a loan from Liberty Financial can help you achieve your business goals.
Commercial vehicles are expensive. For this reason, it’s extremely common to take out a loan in order to get your operation up and running quickly and efficiently. To obtain a commercial vehicle loan, you must first know which type of truck you are trying to finance. Different trucks have different rules and qualifications, making it important to be are aware of whether your vehicle is considered a transportation vehicle or a vocational truck.
Next, you’ll need to consider is a down payment. To determine how much you will need to put down on a truck, look at how long you’ve been in business, your credit score, whether you’re the owner/operator, who you are buying from, any cash reserves you may have, and the age of the truck to be purchased. Where you fall in each of the categories will determine how much or little you will have to put down. If you or your company poses some type of risk, the down payment can increase.
To give yourself a better idea of your financial standing, some good questions to ask yourself are:
- Have I been in been business for at least two years?
- Is my credit score better than 600?
- Have I ever filed for bankruptcy?
It’s harder for new business owners to qualify for a commercial vehicle loan rather than for someone who’s been around and experienced some of the challenges involved. With that being said, a low credit score doesn’t immediately take you out of the running. Your credit score helps the company decide what your monthly payment is going to be, not whether or not you will qualify.
Age does matter when it comes to obtaining commercial vehicle loan. The older the truck, the more likely it is to break down and become a liability. Keep in mind that just because a vehicle may be cheaper, it doesn’t mean it will be worth the buy. Most companies are hesitant about approving a loan on a truck over 15 years old. To be safe, look for trucks 10 years old or less.
Learn more about truck and equipment financing or to sign up for a quick quote.