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Trucking Financing Helps Businesses to Improve Cash Flows
Most businesses that are into manufacturing, do need some form of transportation to move raw material and finished goods. It is therefore quite likely that they will look for some form of trucking financing, to acquire the necessary vehicles.
Deciding Transportation Needs
It is very important for a business to decide on the the required transportation needs, which will allow it to decide the sort of truck that is required in terms of capacity and the running that it will be required to do. This also then allows businesses to decide on the budget and thus the amount of finance required. The next thing that needs to be firmed up, is on whether the loan required is for a short term or a long term. Short term financing will involve larger monthly payments, but the lower installments that long term loans come with, carry the risk of increasing interest rates over time.
Financing Trucking Requirements
There are a number of financing companies which will lend the necessary finance to purchase trucks. Each of them have their own rules and conditions, and it is up to the business taking the loan to find the one that it is most comfortable with. If the decision is to buy a new truck, the dealers themselves will be able to offer in-house financing, which is an alternative that can be looked at. Before approaching any lender for the necessary trucking financing, it is necessary to prepare a proper resume of the business, its future prospects, current cash flows and the people involved. This can help to negotiate rates, if they are properly made. Credit ratings are helpful in this regard. However, it is possible to get such trucking financing even if the credit report is not of the best, though the terms that may be offered for the finance are bound to be tougher.
Conditions for Trucking finance
Truck financing is normally offered for periods that range from one to four years. While it is possible to get finance for the entire required amount, it always help to reduce rates, if the business is able to put up part of the required capital. Provision does require to be made for adequate insurance of the truck, once it is acquired. Most financing companies will insist on this, in order to safeguard their loaned amount. Financing companies also offer flexible payment options especially if the vehicle acquired is used exclusively for a trucking business, where seasonal fluctuations can affect income. Quarterly payments are the most preferred, as this allows the business sufficient time to arrange for making the required payments.