Commercial Truck Financing: The Best Options for Your Business

Updated on August 6, 2021
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    How Commercial and Semi-Truck Financing Works

    Commercial truck financing is available for three purposes:

    • Buying a new or used truck
    • Leasing a new or used truck
    • Repairing or upgrading a truck that your business already owns

    Semi-truck financing can come in many forms, but most often, truck loans will be available as a form of equipment financing. With this financing, the equipment itself serves as collateral for the loan, and the terms and amounts are often directly related to the cost and expected lifespan of the equipment.

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    Commercial Truck Financing Rates and Terms

    The interest rates and terms you receive on a commercial truck loan will depend on factors like the specific vehicle you need, your qualifications, and the lender you’re working with.

    Interest rates: Lenders who provide commercial truck financing generally charge annual interest rates between 5% and 30% based on the borrower’s creditworthiness, the age and financial state of the business, and the type and condition of the truck. These interest rates are usually fixed, meaning you’ll make the same payment every month.

    Loan terms: Terms typically go up to 10 years, with banks generally offering longer terms than alternative lenders.

    Loan amounts: Highly qualified borrowers may be able to get loans for up to 100% of the value of the truck they’re purchasing. However, in most cases, you’ll need to provide a down payment and you’ll receive financing for 75% to 95% of the truck’s value.

    Fees: Semi-truck financing companies often charge fees, such as an application fee, credit check fee, and appraisal fee (to evaluate the fair market price of the truck). These can significantly impact the cost of your loan. Ask the lender for the annual percentage rate (APR) of the loan to find the true cost, including all fees.

    The Best Commercial Truck Financing Options

    The semi-truck loans available to you will depend on how strong of a borrower you are, as well as the type and condition of the truck you want to finance. The strongest borrowers with the best trucks may be able to get a bank loan or a great rate with an online lender. Less qualified borrowers, including first-time owner-operators, will typically only qualify for products from online lenders.


    Large national banks often have solutions designed for commercial trucks and other business auto loans. However, most local banks don’t offer commercial truck financing because they view it as an expensive, risky investment.

    You’ll likely need a great credit score and a down payment to qualify for a truck loan from a bank, but this kind of financing will likely have the lowest interest rates and longest terms.

    The following banking institutions all offer some form of commercial vehicle financing:

    • Wells Fargo: This bank offers loan and lease options for new and used trucks, as well as leasing for semi-trailers. Terms on Wells Fargo equipment finance options range from 12 to 84 months. Wells Fargo works with owner-operators, highway fleets, leasing companies, and more.
    • Bank of America: Bank of America provides commercial truck financing through their equipment loans. These loans can have terms up to five years, fixed rates as low as 3%, and amounts starting at $25,000. Bank of America also offers loans and leases for cars, vans, and light trucks. These loans have terms from 48 to 72 months and fixed interest rates as low as 2.49% APR.
    • Santander Bank: Santander Bank has an extensive vehicle equipment financing program, with options for vehicle funding, commercial vehicle loans, heavy-duty trucks, and more. With their commercial vehicle loans, you can finance a new or used vehicle with terms from 24 to 60 months and amounts ranging from $25,000 to $10 million.
    • U.S. Bank: This financial institution provides commercial truck financing in amounts up to $500,000. They don’t require a loan down payment and offer terms from 24 to 60 months or more. They also allow you to customize your payment schedule and finance multiple pieces of equipment on one contract.
    • PNC Bank: PNC doesn’t provide very specific information about their transportation finance program. However, they do offer both leases and loans for commercial trucks and other related vehicles.

    Online Lenders

    Online lenders generally charge higher interest rates than banks (5% to 30%) and tend to provide shorter terms (under seven years), but there will be fewer qualification requirements, simpler application processes, and faster funding times.

    For example, if you’re interested in working with Crest Capital, you can expect truck loans of up to $1 million with terms of two to seven years. Crest can offer interest rates as low as 5% and financing for up to 100% of the value of your semi-truck. To qualify, however, you’ll need a 650 personal credit score (which is fairly high for most online lenders) and at least two years in business. Crest Capital does not require a minimum annual revenue.

    Other online lenders that offer semi-truck financing include: 

    • Smarter Finance USA
    • Balboa Capital 
    • First Capital Business Financing
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    Truck Financing Companies

    Some lenders specialize in commercial truck financing. You may find that these lenders  charge lower interest rates than a general equipment financing company and require a smaller down payment. In addition, they can work with you to assess the right value for your truck, so you know exactly how much financing you’ll need to cover your costs.

    For example, Truck Lenders USA offers commercial truck financing in the form of both loans and leases with amounts ranging from $15,000 to $250,000.

    As with any lender, be sure to research and read customer reviews to ensure the company is reliable, trustworthy, and ultimately, someone you’ll feel comfortable working with.

    How to Qualify for Semi-Truck Financing

    Since trucking is such a specialized industry and the truck itself serves as collateral for the loan, the lender’s risk is smaller than with a traditional loan. Therefore, even if your qualifications (e.g., credit score, revenue, time in business) wouldn’t be sufficient enough for a traditional business term loan, you may still be able to qualify for a commercial truck loan.

    Highly qualified borrowers will often be able to qualify for 100% financing and interest rates as low as 5%. Borrowers with less-than-ideal qualifications, such as bad credit or an old truck, will likely need to put money down and pay rates between 7% and 30%.

    Let’s review some factors that will affect your eligibility for commercial truck financing in greater detail.

    Are You Buying a Lender-Friendly Truck?

    You need to know what truck you’re interested in purchasing or leasing before applying for financing. Since the truck serves as collateral for a loan or lease, the lender will place a lot of value on the type of truck and the condition it’s in.

    The first thing they’ll consider is whether the truck is a vocational truck or a long-haul truck (a semi). A vocational truck is a garbage truck, a dump truck, or another type of truck with a specific use that’s used primarily within a single geographic area. A semi-truck is a truck that transports freight cargo, often over hundreds of miles.

    The “long-haul” aspect puts more wear on a truck, making the financing of a semi-truck a riskier venture. With more miles on the truck, the more likely it is that the business owner will need to repair the truck. Plus, if your long-haul truck suddenly goes out of commission, you won’t generate as much income and then may fall behind on your commercial truck financing payments.

    Along with the type of commercial truck you’re financing, a lender will also evaluate the condition of the truck. Older trucks make for less valuable collateral, but if you’re just starting out, you may have to work with something used as opposed to something new, which will be much more expensive.

    If you’re financing a used truck, it should be in good condition. At a minimum, you’ll want to try to look for a truck that is fewer than 10 years old and has fewer than 600,000 miles on it.

    In order for your lender to evaluate you for commercial truck financing, you’ll likely need to provide the following information about your truck:

    • Make, model, and serial number
    • Year
    • Mileage
    • Specify if used
    • Condition report
    • Any major repairs on the truck in the past
    • At least three pictures of the truck
    • Specify if sold privately

    Are You Buying From a Reputable Truck Vendor?

    Another important detail a commercial finance company will look at is who you’re buying the truck from.

    Generally speaking, it’s easier to get a semi-truck loan if you’re buying from a dealership because there’s a more standardized paper trail on the truck, and the lender has greater assurances of its condition.

    However, if the truck is in good condition, you can be approved even if you’re buying from a private party or through an auction. Valuation sites like Truck Blue Book (similar to Kelley Blue Book for cars) are making it easier to get approved for trucks purchased through a private party or auction.

    What's Your Personal Credit Score?

    Your personal credit score is important on any business loan application—including a commercial truck financing application. However, with commercial truck loans, the strength of your personal credit score matters most for what rates and down payment requirements you qualify for.

    Lenders may be more likely to accept poor or average credit because the truck you’re purchasing serves as collateral on the loan, but a strong credit score will help you receive the best rates and terms on your loan.

    Do You Have Tax Liens, Repossessions, or Delinquencies on Your Business?

    The lender will also look for any recent liens, repossessions, or delinquencies on your business. These might show up on your personal credit report or your commercial credit report.

    Truck lenders will often deny business owners who have:

    • An open bankruptcy
    • Recent vehicle repossessions
    • Past-due child support payments

    Do You Have a Down Payment and Cash Reserves?

    Most borrowers have to put some money down on a commercial truck loan. The average down payment on commercial truck financing is 15%, but it can range anywhere from 0% to 25% depending on the strength of your application.

    You’ll also need to show business lenders that you have enough cash reserves to afford your loan payment and other expenses, like unexpected repairs and insurance payments. Most lenders like to see cash reserves of at least $10,000, and will likely want to see a higher amount if you have a lower credit score or are a younger business.

    How Long Have You Been in Business?

    Commercial truck financing for first-time owner-operators is challenging. Many commercial truck lenders won’t consider owner-operators that have been in business for fewer than two years, especially if you’re looking for a large amount of financing (over $40,000).

    However, if you have strong credit, are buying a newer truck in good condition, and you have the cash for a 10% to 20% down payment, you’ll likely be able to qualify for a truck loan even if you’re a new business.

    Do You Have Truck Insurance?

    Commercial truck lenders will also look at the insurance you have for the vehicle.

    You can sometimes be approved for a commercial truck loan without insurance, but generally, you’ll need to secure commercial auto insurance before the funds get deposited into your account.

    If the truck being financed is the only asset in your business, you’ll typically need:

    • Liability coverage
    • Physical damage coverage
    • Bobtail coverage for non-trucking use
    • Storage and cargo coverage to ensure whatever you’re hauling

    You can also purchase supplemental coverage depending on your business’s needs.

    Other Requirements

    Finally, a complete commercial truck loan application will contain a lot of detailed information about your business—even more so than business owners applying for financing within other industries.

    You may have to provide the following documents:

    • Proof of business (e.g., EIN or certificate of good standing)
    • Personal and business tax returns (up to three years)
    • Current profit and loss statement for your business
    • Current business balance sheet
    • Current and past bank statements (last 12 months)
    • Your commercial driver’s license (CDL)
    • Any business licenses or requisite certifications
    • USDOT number (U.S. Department of Transportation) for interstate carriers and certain intrastate carriers
    • Motor carrier number from the Federal Motor Carrier Safety Administration (FMSCA) for interstate carriers and certain intrastate carriers

    The Bottom Line

    A wide variety of borrowers—even first-time owner-operators and those with average credit—should be able to find a commercial truck financing option that works for them.

    Be sure to find your truck first, then compare lenders to find the best rate and terms for your business.

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    Frequently Asked Questions

    Meredith Wood
    GM, New Markets at NerdWallet

    Meredith Wood

    Meredith Wood is the founding editor of the Fundera Ledger and a GM at NerdWallet.

    Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.

    Read Full Author Bio