Without the transportation industry, it would be impossible for anyone to get from one place to another and back again. However, anyone who owns a transportation business would say that a huge amount of money is needed to keep it running. Purchasing a fleet of vehicles and investing in their upkeep or repairs and settlements in case of accidents is far from being cheap.
Plus, you’ll have to think about the costs associated with marketing your business and hiring and training your employees. While you’re at it, don’t forget to factor in insurance, and the wildly fluctuating oil and gas expenses. To stay open for business, company owners who often encounter cash shortages ultimately decide to apply for trucking and transportation business loans.
If you want to grow your business despite being confronted with cash flow issues, you’ll need to set your company’s finances in order. These top 6 questions people ask about trucking and transportation business loans should give you a head start.
1. How long does it normally take to apply for trucking and transportation business loans?
Trying to secure trucking and transportation business loans from traditional banking institutions means having to wait for several weeks. You’ll have to deal with the collection and submission of a ton of paperwork which includes tax documents, financial statements, and business papers. In other words, you can’t expect your loan application from a bank to take a short time.
For this reason, business owners who aren’t willing to invest a lot of time on loan application processes choose to borrow from alternative lenders. Compared to traditional financing institutions, non-bank lenders can readily finance transportation companies. They only require companies to turn over their basic business information. Thanks to their streamlined loan application process, borrowers are able to complete their application in less than 15 minutes.
2. Is it possible to obtain trucking and transportation business loans without putting up collaterals?
In most cases, banking institutions will require borrowers to put up their property or equipment as collateral. The collateral serves as a guarantee that in the event a business folds, the banks will still get their money back. When borrowers fail to repay their trucking and transportation business loans, banks will sell the property or equipment to recoup their losses.
Applying for trucking and transportation business loans from non-bank lenders is a different story. Although you can borrow from them without putting up any collateral, their loans typically carry higher interest rates compared to those from banks.
3. When a loan application is approved, how long does it take before the money gets in the business’ bank account?
When a bank approves your application for trucking and transportation business loans, it usually takes them up to 60 days to fund your company’s bank account. On the other hand, it will only take less than 24 hours for an alternative lender to do the same. This is why many transportation companies prefer to apply for business loans from non-bank lenders.
4. When it comes to trucking and transportation business loans, will business owners need to settle for less money than they need?
Generally speaking, a transportation company owner’s chances of securing trucking and transportation business loans from traditional banking institutions are low. However, when they borrow from non-bank lenders, they can obtain up to $1 million in financing.
5. Will it be possible for a transportation business to qualify for a loan even if it has bad credit?
Unless your transportation business has a near-perfect credit score, traditional financing institutions won’t lend you their money. On the other hand, alternative lenders won’t hesitate to lend you their money even if your credit score is less-than-stellar. Most of the non-bank lenders only require a business to have been operating for at least a year. Furthermore, they also require for the lender have the capacity to demonstrate steady cash flow.
6. Are There Certain Restrictions in the Process of Applying for Trucking and Transportation Business Loans?
Banks will require you to disclose exactly how your business can put the borrowed money to good use. Furthermore, they’ll expect you to invest the money as you said you would in the event your business loan application is approved. However, with non-bank lenders, such restrictions don’t apply.
Do You Want to Know More About Trucking and Transportation Business Loans?
If you want to have more information about securing trucking and transportation business loans, contact the financial experts at SMB Compass now. Call us at (888) 853-8322 or email us at info@smbcompass.com and get all the details. It’s time transportation companies get the right business loans.