Truck Finance is a means of using financial products for buying any commercial vehicle of your choice. Usually, automobile dealers and banks offer these loan services. However, there are other non-traditional lenders that provide more competitive options. While this finance is mostly used for buying new trucks, it can be used for many other truck-related purposes as well.
What You Can Use Truck Finance For
Beyond the purchasing of the truck, you can also use truck Finance for
- Maintenance: Vehicles needs regular servicing and maintenance to serve their purposes, trucks more than most. This maintenance covers oil changes, tyre changes, servicing the engines, etc. If you have a fleet, the cost of maintenance alone could run into hundreds of thousands, all necessary expenses to keep your business running.
- Salaries: The employees of a trucking business are as important as the trucks itself, and truck Finance is one way to ensure their payments regardless of the financial condition of the company. The job is very demanding, and as an employer, the least you can do is give your employees incentive with on-time payments.
- Buying Spare parts: This is related to maintenance as well but regardless of it, replacing parts of a truck is a regular occurrence that could cost thousands to get the perfect original replacements. You can use truck Finance to take care of this on time.
- Taxes and Licenses fees: Operating a trucking business requires different licenses and taxes. For instance, your drivers must have a commercial driver’s licences before they can operate heavy commercial trucks. Getting this license is a strenuous and expensive process that involves background checks, driving tests, exams, and fees. Apart from this, there are also legal obligations that require compliances, all of will cost money.
- Day to day operations: Running a trucking business is expensive. For instance, fuel alone costs hundreds of thousands annually. You can take care of these daily expenses using truck Finance and ensure the smooth operations of your business.
Types of Truck Finance
Truck Finance can come in various forms, all designed to ensure that you can start your business, sustain your business, or expand your business when you feel it is necessary to do so. Some of the standard options include:
- Working Capital: A working capital finance gives you access to cash in exchange for a percentage of your monthly revenue in the future. Thus, the amount you can be offered will depend on how much your business generates.
- Invoice Factoring: It is not unusual to have unpaid invoices. Through this finance option, the lender converts the invoices to cash for you and charge a percentage of the invoice as a fee. Thus, it is the lender that cashes the invoices from your customers when it is eventually due.
- Truck Loan options: You can also get the regular term loans such as hire purchase, chattel mortgage, personal loans, etc. from both traditional and non-traditional lenders, while traditional lenders such as a bank may not grant this loan or attach strict conditions to it. You can use non-traditional lenders.