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Dec 06, 21
Let’s Talk Financing
By Andrew Johnston, Co-Founder, TrueCore Capital
Financing.
For many of us, that word alone is enough to generate unwelcome anxiety in the pits of our stomachs. It’s a topic that small business owners across the nation avoid and, for that reason, is so easy to put on the backburner – especially as a busy owner operator or small fleet owner. And when you actually need financing, all your worries come to fruition because you haven’t taken the necessary steps to ensure a smooth (and significantly cheaper) financing journey for yourself and your business.
Financing.
It’s a word that is shrouded in mystery and brings up far more questions than answers for even some of the savviest: How do I qualify for financing? Who can tell me if I qualify for financing? How does personal credit affect my business interest rates? Am I stuck if I don’t qualify for my Bank / Credit Union’s finance program? What if I have no credit? Poor credit?
Financing.
It doesn’t have to feel like this. What if I told you that there was a group of professionals who work intimately with 27 nationally recognized trucking lenders to make sure your questions get answered AND potentially save you tens of thousands of dollars in interest by placing you with the lender who is just right for you and your business? Well, it’s not as far-fetched as you may think, whether you’re a first-time buyer or an established fleet.
Until then, here are some tips for the road (no pun intended):
- Start Early. The earlier you can recognize the opportunity to buy a truck or trailer, the better you can position your personal and business credit to secure the best cost of funds.
- Paper Trails are important. The first question that a lender is going to ask is “can they afford it?” and one of the easiest ways to prove that is through a continuously healthy bank account.
- Open a business bank account AND USE IT. Having a business bank statement available for review is a powerful tool for truck/trailer financing. It also opens up the possibilities of business working capital, lines of credit, and other cash-based lending programs. Creating a clear separation between your personal and business cash sends a signal that you mean business.
- Never underestimate a good story. Imagine I asked you for a loan to buy a truck – which version of myself would you more likely give a loan?
- I have great credit, and I am looking for $85,000 for a truck. Will you give it to me?
- I need $85,000 for a late model truck, and I have haul sources lined up that can net an additional $8,000/month which would more than cover my payment. I also don't want to pay too much in interest so I will be putting 10% down.
The mystery of financing is easily solved by addressing the root of the issue. Financing is not transactional; it is a relationship built by people that understand you, your business, and your financial needs.
