Yes, you can finance a box truck through your business. But unless you intend to pay cash or use your business credit line, it is recommended you seek borrowing options that can help cover the cost of the box truck you intend to purchase.
Note that the type of financing that works best for your business will most often depend on a wide array of factors including your financial situation, taxation needs, and whether you intend to use the box truck solely for business purposes or a mix of business and personal use.
Truth be told, box trucks are valuable equipment especially when it comes to transporting small and medium-sized freight. These trucks tend to come in different sizes, each of which carries a sizeable load. They also give room for easy access to the cargo area via roll-up doors or swing doors, and their economical engines guarantee fewer refueling stops.
If you own a trucking business or service business that moves things like furniture, appliances, and boxes, you probably have one or more box trucks in your fleet.
However, instead of making a big one-time purchase or using up your company’s credit line, it is often advisable that you opt for external truck financing especially since with this option, you get funds to finance your box truck while you make monthly payments that work with your budget.
This sort of financing works a lot like other types of auto loans. If you do not intend to pay for the box truck upfront, financing comes in to break up the cost into more affordable payments that you pay over some time plus interest or fees.
The exact way your own deal works out depends on the exact type of financing you go for. However, the best and safest solution is to work with a reputable financial broker that will act on your behalf to find the ideal lending provider to meet your needs and budget.
Box Truck Financing Options to Consider
When looking to purchase a box truck for your business, have in mind there are numerous options to choose from. Although it is nearly impossible to find a lender that offers all at once, you must take your time to consider the one that best suits your business.
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Business Auto Loan
With a business auto loan, you can purchase the box truck under your name or your business’s name and then pay the lender a fixed monthly repayment. If you plan to take out the loan in your business’s name, you may be expected to provide a personal guarantee from all business owners especially if your business’s finances aren’t strong enough.
However, you can obtain business auto loans from online lenders, banks, credit unions, and even directly from the manufacturer or dealership. Note that these loans will most often require a down payment of around 10% to 20%.
Unlike a business auto loan, this option allows your business to make use of the box truck without really owning it. Note that the lender buys the box truck on your behalf, and then leases it back to you. You are then expected to make monthly lease payments until the term of the lease is up.
After your lease is over, you may have to pay off the remaining value on the lease and assume full ownership of the box truck, trade the box truck for a new one, or consider refinancing the lease. Have it in mind that this sort of truck financing most often doesn’t come with a down payment.
Commercial Line Of Credit
This is one of the fastest, most flexible funding solutions for trucking businesses. Note that you can easily get a line of credit that you can draw from whenever you need it, and replenish however you want, and whenever you want to.
Note that these credit lines are like a multifaceted tool that you can use for any business purchase or expense – irrespective of the cost or urgency – exactly when you need it. Also note that these are most commonly used for trucking businesses that are in constant need of capital for spontaneous projects and expenses without warning, as well as for those that need to use cash to cover a wide variety of expenses at once.
SBA Commercial Box Truck Loan
It is also possible for your business to be eligible for a Small Business Administration (SBA) box truck loan. Have it in mind that these loans are backed by the SBA, and this entails that they come with competitive rates and fees. Nevertheless, they can take a while to process and have very daunting eligibility requirements, and might not be suitable if your business is in a hurry.
Heavy-Duty Box Truck Financing
This sort of financing is designed primarily for box trucks and other heavy-duty trucks, which you might have difficulty financing with your typical car loan. However, just as with a commercial line of credit, your business can leverage this option to acquire a box truck or even grow your fleet but will more or less require your business to have been around for at least two years, boast of strong credit and consistently high revenue.
Specialty Box Truck Financing
You can most definitely use this option to modify a box truck or buy specialty equipment — what you can’t get at an auto dealership. Note that this sort of financing can help your business acquire equipment to make better use of box trucks your business already owns, like a wheelchair lift, crane, or towing equipment. A good number of lenders also allow you to combine this option with a lease or auto loan.
Ideally, a personal loan provides you with the necessary funds you can use for a wide range of purposes, ranging from improving your home to buying a car. Have in mind that this option can be suitable if you intend to purchase the box truck for personal and business use.
However, it is most often recommended you consider this option as a last resort, especially since this kind of loan is known to come with higher interest rates and fees than some other financing options.
Truth be told, the right kind of finance, especially when tailored to your business needs, can provide numerous vital benefits. Note that by leveraging some of the options above, you can do away with the need to spend from your capital and cash reserves while also structuring your outgoings in a manner that reduces their impact by spreading out payments depending on your needs.