Tidying up Your Company's Credit

10 Steps to Make Your Next Truck Loan Application Easier and Less Stressful


If your company doesn’t have a business plan, visit the U.S. Small Business Administration’s web site for tips on how to write one: http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/how-write-business-plan

 

Step 4 – Establish good commercial credit references.

Establish or obtain commercial credit references from three or more companies with whom you do business, Pembroke said. A commercial equipment lender or bank is the most important source; additional references could be your tire dealer, diesel fuel provider, parts supplier, or anywhere your company has established accounts it pays regularly. The credit references can help show your company as a good credit risk.

 

Step 5 – Check your company’s business credit report and score at the major business credit bureaus. If your company isn’t listed, register your company with the business credit bureaus.

Check your company’s credit history by requesting a report from one, two or all three of the major business credit bureaus.

Verify the accuracy of the information contained in the reports. “If you see something that’s wrong, make note of it and write a brief, but detailed explanation of the error, why you think the information is incorrect and how the information should be updated or corrected,” Pembroke said. “Use accurate dates and amounts since the business credit bureau must verify the information you provide with your creditors.”

Because business credit transactions don’t have to be reported, any or all three of the business credit bureaus may not have a report for your company. See the sidebar on the differences between personal and business credit, how credit transactions are reported differently and how to establish a business credit report.

 

Step 6 – Actively manage your company’s debt.

If your company is current with all of its creditors, congratulations! Since payment history contributes significantly to its financial score calculation, staying current with bills is the best thing you can do to keep your company’s score higher, Pembroke said. If your company has any delinquent payments on its record, it’s vital to get current and stay current with payments.

“The longer your company pays its bills on time after being late, the higher its credit score will rise,” she added.

 

Step 7 – Create a list or flow chart of your company’s corporate structure.

To help lenders understand your company’s organizational structure, create a flow chart that explains who is responsible for what at your company. Does your company have a CFO, fleet manager or vice president of operations? If so, does your fleet manager report directly to your vice president of operations, or to the CFO? Or as the owner of the company, do you act as the company’s fleet manager, CFO, and operations executive? Lenders will want to know who is ultimately responsible for your company’s equipment and who holds them accountable. Keep the flow chart current so you don’t have to create a new one when applying for a loan.

 

Step 8 – Draw up a fleet description, listing the number and type of trucks and trailers your company currently operates and how they are used.

In that description, it’s also important to explain how the new or used equipment acquired with your loan will be used. Will your company be able to go after new or more business with the new equipment; or is your company replacing older units? If so, why and do you expect any improvements in driver satisfaction, efficiency or payload or reductions in expenses with the new equipment?

 

Step 9 – When financing your trucks, diversify your resources by using a captive lender that truly understands trucks and the trucking industry.

By using a captive lender that’s linked at the hip with the truck manufacturer and truly understands trucks and the trucking industry, like PACCAR Financial, truck operators don’t have to explain the necessity for certain equipment on their trucks, Pembroke said.

For example, a heavy hauler may need expensive equipment like higher horsepower engines, auxiliary transmissions or fully locking rear differentials that raise the cost of their trucks, but makes them more efficient in generating revenue.

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