Fortunately, by applying for a trucking business loan, you can access the additional working capital you need. This blog post will explain how you can utilize a small business loan to grow your trucking business.
Trucking Business Finance Options: How to Select Financing for Your Business:Although this post will primarily focus on trucking business loans, there are many types of loan options to consider, such as:
- Business lines of credit: If you take out a business credit line, you’ll receive a set credit limit that you can borrow against and repay as needed.
- Equipment financing: If you need funding to afford business equipment, you may benefit from an equipment loan.
- Commercial truck loans: Similar to equipment funding, business owners can secure a commercial truck loan to meet their commercial vehicle needs.
- Business credit cards: Some business owners use credit cards to afford business expenses. Although they provide significant convenience, it’s crucial to avoid overspending.
- SBA loans: The SBA provides financing to trucking business owners. However, you’ll need to prove that your business couldn’t secure traditional financing.
- Time in Business: Some financing companies have a time in business requirement, so startup business owners likely won’t qualify.
- Minimum Credit Score: Most financing providers will want to review your credit score. Due to this, you’ll need to raise your score before applying if you have bad credit.
- Bank Statements: In most cases, business lenders will request to review your bank statements. In addition to qualifying, these figures could affect your business loan repayment terms and interest rate.
How to Use Truck Financing:
1. Expand Your Trucking FleetTypically, trucking companies with large fleets earn a greater return on their investment. In addition to saving on the cost of shipping per mile, larger companies can save on these expenses:
- Commercial Vehicles and Semi Trucks
- Truck Trailers
- Load Boards
2. Hire More DriversHaving enough drivers is necessary for your trucking business to succeed. However, many hiring costs will need to be purchased first. To start, you may need to invest in hiring costs, such as hiring a recruiter or posting on paid job sites. In addition, you must be able to afford:
- Commercial drivers licenses
- Possible union costs
- Staff uniforms and personal equipment
3. Update Trucking TechnologyCurrently, there are more high-tech solutions for trucks than ever before. Due to this, implementing new technology is one of the surest ways your business can establish a competitive advantage. If you wait to update your technology, you may fall behind your competitors. There are many technology trends for trucks, including:
- Improved camera systems
- Enhanced routing systems
- Electronic logging devices
4. Improve Your Business LogisticsThe transportation and trucking industries are very dependent on organized, seamless logistics. Your business will likely struggle to fulfill increased demands without well-planned logistical processes. In addition to logistical success, having logistics in place can help improve your business’s revenues. For example, UPS’s policy of only using left turns when necessary was a logistical move. After making this change, the company used 10 million fewer gallons of fuel per year. Even if your trucking company isn’t operating on a large scale, there are still logistical changes you can make. Improving your company’s logistics involves many different pieces. These advantages are often found by process engineers, operation experts, and even using automated data systems. By applying for a trucking business loan, you can invest in a system that effectively meets your needs.
5. Save on InventoryUsually, buying larger quantities can help your business save per unit. Over time, driving down marginal costs is one of the best ways to increase your trucking business’ bottom line. You can purchase more inventory for your trucking company using additional working capital. For instance, you can buy inventory such as:
- Mechanical equipment
- Other goods in bulk (which lowers your trucking business’s annual expenses).