Are you an owner-operator looking forward to expanding your business? Then one of the things that you’ll need to do is to find a way to finance your growth. To meet the growing demand, you’ll need more semi-trucks, drivers, and insurance. Your semi-trucks, being your most significant investment, needs to have their essentials, including emergency kits and an 18-wheeler headache rack for each truck.
But what can you do to make sure that you get a loan approval? Here’s how you can improve your chances of bagging that loan for your semi-truck business:
Boost your FICO score and improve your credit report
Your credit score is among the few things that you’ll need to improve before filing your loan application. For semi-truck financing, you’ll need to have a decent score of at least 600 to qualify. Here are a few things that you can do to improve your credit score and report:
- Pay your dues on time.
- Avoid missed and late payments.
- Avoid foreclosures and repossessions.
- Stick to a low credit utilization rate.
- Monitor your credit reports.
- Avoid applying for new lines of credit within a short period.
Save for a cash reserve and down payments
Aside from the upfront fees, you’ll also need to prove to your lender that you have a cash reserve. While it’s true that some lenders will accept your loan application even if you don’t have enough money for a down payment, you’ll find it extremely difficult to get approved. Having a cash reserve will give your lender more reasons to approve your loan. This is due to the fact that you can still afford your loan even when unexpected expenses arise.
Gather all of the required documents
It doesn’t matter who your preferred lender is. You’ll need to gather all documents and sign all the paperwork during the application process. Aside from the proof of business, business tax returns, balance sheets, commercial drivers license, and bank statements, make sure to ask your lender for a complete list of documents that you need to prepare. Also, if your lender asks for additional documents or needs you to sign more paperwork, don’t make them wait.
Choose the right semi-truck
Keep in mind that finding the right semi-truck that will fit your business needs is essential. It would be best to find a dealer that offers trucks that are no more than ten years old and have less than 700-kilometer mileage. If they can provide repair, maintenance, and condition report, that will be better.
Obtain the right business insurance
Some lenders will approve your business loan application even if you are still looking for the right insurance. But before receiving the funds, they will most likely need you to secure the right coverage before they release the funds. Make sure to assess your business needs when choosing the right business insurance.
Keep in mind to improve your credit score and credit history and save for a down payment before filing your loan application. You’ll also need to obtain the right insurance, choose the right truck, and gather the necessary paperwork to improve your chances of getting loan approval for your semi-truck business.