Key takeaways

  • Financing a semi truck is often easier to obtain compared to other business loans as the truck is collateral for the loan
  • It's possible to get a semi-truck loan with bad credit, though it may require a larger upfront payment and come with higher interest rates
  • When comparing semi-truck lenders, look for factors such as interest rates, funding speed, types of loans available, fees and repayment terms

A new semi truck can cost well into the six figures. Even if you could afford to pay in cash, financing your truck instead allows you to buy a new or used truck without sacrificing cash flow in other areas of your business or personal life. Most loans allow you to use the vehicle as collateral.

The cost of a semi-truck loan varies based on whether you buy a new or used vehicle, the lender you choose and even the state you live in — some states, including New Hampshire, have lower registration fees than other places.

When you’re ready to apply for financing, follow these steps to help improve your chances of quickly getting approved.

1. Decide what type of semi-truck loan

Getting a semi-truck loan allows you to buy your truck instead of applying for semi-truck leasing. Leasing can be cheaper, but ultimately, it does not leave you with an asset you own outright.

While buying a truck is often a smart long-term move, not all types of equipment loans are created equal. Some loans are backed by the government, while others are only privately funded. Many loans are open to people with a wide range of credit scores, and some are quite selective. Plus, different lenders may have very different loan interest rates.

 

Loan type Description
Term loan A lump sum of cash typically paid back monthly over a set term of 3 to 7 years.
SBA loan Loans backed by the U.S. Small Business Administration but provided by lenders. SBA loans take a long time to underwrite, up to 90 days.
Equipment line of credit A large revolving line of credit that operates similarly to a credit card. You only pay interest on the outstanding balance, not the total line. These may charge a fee every time you withdraw and a maintenance fee to keep the line open.
Commercial truck loan (direct lender) Direct lenders specialize in loaning money to semi-truck owner-operators and have looser credit requirements for approval than major banks. Rates tend to be higher than loans from other lenders.
Equipment loan Similar to a term loan, it’s designed for only purchasing equipment. Terms can vary from 12 to 84 months or longer.
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Bankrate insight
If you can’t get a semi-truck or equipment loan, consider taking time to build your credit. As you do, you may want to consider renting or leasing a truck to get your business off the ground. Renting is a short-term form of vehicle use that comes with higher costs than leasing or purchasing, but both options have relaxed requirements compared to taking out a semi-truck loan.

2. Find out how much loan you can afford

As a semi-truck owner-operator, you may get approved for more loan funding than you should reasonably take out. Or you may need to rethink your purchasing plans based on a lowball offer from the lender. The amount of your semi-truck business loan will depend on everything from your credit score and current debts to your business revenue and business history. Drivers who can’t get approved for a traditional equipment loan may want to consider bad credit business loans instead.

You can use our business loan calculator to get an idea of how much money you can afford when considering factors like interest rates and monthly payment estimations.

3. Compare semi-truck lenders

Probably the two most important variables to compare between semi-truck lenders are interest rates and funding speed. You want to ensure you’re not overpaying over the life of the loan and that you can get your money when needed. You’ll also want to compare lenders by:

  • Types of loans available
  • Origination fees
  • Repayment terms
  • Early repayment policy
  • Application process
  • Customer support

The business loan eligibility requirements between lenders may also inform your choice of lender. Unless you have perfect credit, you may find some lenders more willing to work with you than others. But even the best bad credit business loans charge high interest rates and may require additional collateral.

Examples of semi-truck lenders

Here’s a look at some lenders that offer loans you can use to purchase a semi truck.

Lender Loan types Best features
Bank of America Bank
  • No maximum lending amount
  • Interest rates starting at 6.5%
  • Origination fee is only 0.5%
SMB Compass Online lender
  • Funding between 24 to 48 hours
  • One-page online application
  • Loan amounts up to $5 million
  • Interest rates starting at 5.99%
Triton Capital Online lender
  • Interest rates start at 5.99%
  • Flexible payment schedules
  • Approval within 2 to 4 hours
National Funding Online lender
  • Funding up to $150,000
  • Only need to be in business for 6 months
  • Accepts fair credit applicants
CAG Truck Capital Direct lender
  • No application fee
  • Same day approvals
  • Accepts bad credit applicants
Balboa Capital Direct lender
  • Funding up to $500,000
  • Same-day funding
  • Only need one year in business
  • Minimum credit score of 620

Do I have to have a CDL license to get semi-truck financing?

A commercial driver’s license (CDL) is required to drive a semi truck. While you may not expect your lender to care about this document, they could ask for proof.

Some of the best semi-truck lenders may waive a CDL requirement if you have enough experience in the field or plan on hiring drivers. Or you could get a loan through a local hauler program. This program is for drivers who go fewer than 300 miles at a time.

4. Get semi-truck insurance

Most lenders won’t release funds until they are satisfied that you have proper insurance for the vehicle. You may get pre-approved without insurance but can’t complete the loan without it. Insurance protects you, the cab, and the cargo of the semi truck. Lenders want to know that if your truck gets wrecked, you can still satisfy your loan with insurance money.

Some of the most common types of semi-truck insurance are:

  • Primary liability. This type of insurance covers you if you’re responsible for damage to people or property.
  • Bobtail. If you’re driving without your trailer, bobtail insurance covers accidents involving the truck alone.
  • Non-trucking liability. This insurance will kick in if you use your truck for non-business purposes when an accident occurs.
  • Cargo. Cargo insurance ensures you can replace your cargo if it is damaged or destroyed by an accident or natural disaster.
  • Physical damage. This insurance can also help you cover the cost of physical damage to your truck or trailer.

5. Gather required documents and information

Having your current documents on hand will expedite the approval and underwriting process. Make sure you don’t submit outdated or error-filled documents, which will delay the lender’s ability to fund your loan. Documents to collect include:

6. Apply for semi-truck financing

Once you have all your documents, you can apply for your loan. If you apply with a bank or credit union, you may have to apply in person or on the phone. Getting approved will also take time, possibly one to three days or longer.

Online lenders typically have streamlined applications that can be filled out quickly. Many can approve you within minutes and get you funding in as little as 24 hours.

If you’re approved for your loan, read carefully through the loan agreement and review the terms line by line. Some important factors to pay attention to include the cost of the loan, repayment terms and schedule and what happens if you default. You especially want to ensure there are no additional fees you weren’t aware of before applying.

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If your loan application is denied, check with the lender to see why. Depending on the reason, you may want to consider a different type of loan or a different lender with more relaxed eligibility requirements.

Bottom line

Like other business lending, semi-truck financing can help you move your business forward. Interest rates and terms vary by lender, and only some lenders can accommodate people with bad credit. Before applying, make sure you understand the costs and know how to manage your loan.

Frequently asked questions

  • Most semi-truck loans go up to 60 months, paid monthly for the loan term.
  • Some online and direct lenders don’t require a down payment. Be aware that you may have to have a higher credit score to avoid putting money down.
  • It’s possible. Lenders have been tightening standards in response to rising interest rates. This can make it harder to find loans if you have bad credit. But direct lenders often work with applicants who have bad credit. They have a more flexible underwriting process and may be open to offering financing to bad-credit borrowers.