Using captive lenders also helps companies diversify their source of loans, allowing them to reserve lines of credit at the bank for operational needs, she added.
“By using a captive lender that understands trucks and the trucking industry, you’re setting your company up for a more successful lending experience,” Pembroke added. “For example, since PACCAR Financial understands how some trucking operators like agricultural product haulers or loggers have cyclical businesses dependent on things like the weather, PFC can offer payment options better suited for their business.”
Step 10 - Be prepared to make a down payment, depending on the extent and quality of your past credit history.
Pembroke said lenders are still looking for loan applicants who have an appropriate amount of “skin in the game” by asking for a down payment.
Applying for state and federal grants, like those available from the California Air Resources Board, can help you pay for new equipment with technology to reduce emissions and to run more fuel-efficient, Pembroke said. While having those grants when you apply for your company’s loan can make your company’s loan application more attractive to a lender, be careful, Pembroke advised. For example, don’t count on the grants alone to automatically qualify you.
“They want to know that the company borrowing the money has a vested interest in the equipment,” she said.
“By utilizing lenders who understand trucks and the trucking industry, tidying up your company’s safety fitness rating, and getting your company’s business plan and financial statements together, you’re placing your company in a good position to qualify for a loan,” Pembroke said.
“Plus, following these tips will most likely make the loan process less stressful.”
Karen Pembroke is the director of credit for PACCAR Financial
Be Aware of Differences in Business Credit Reporting from Personal Credit Reporting
Trade or business credit, which is not reported the same way as personal credit, often refers to transactions involving business issuing another business credit.
Business credit bureaus gather information about trade credit transactions to create a business credit report using the business’ name, address and federal tax identification number (FIN), also known as an employer identification number (EIN). Business credit scores range on a scale from 0 to 100, instead of the 300 to 850 range used in personal credit ratings. As with personal credit scores, the higher the business credit score, the better the company’s credit rating.
In many cases, lenders will rely on a company’s business credit report to determine if they want to grant a company credit and how much credit they'll give.
Because information provided to the business credit bureaus is sent in voluntarily—businesses are not required to send it in--the credit bureaus may never receive all or even any information about a company’s business credit transactions. So, establishing a business or trade credit report for your company at one or all three of the business credit bureaus would be a good idea.
To check your company’s credit report or to establish a report at one or all three major business credit bureaus lenders commonly use, visit their web sites: