This is a common scenario in the trucking industry. Most of the time the guy knows of the balloon payment but there is a surprising number of people who did not realize their agreement called for a balloon payment. They have years worth of payments into the truck and no way to pay off the end payment. Semi truck financing is tougher to get these days so what does a person in this situation do?

1) First thing I recommend doing is asking the current lien holder or leasing company to see if you can work something out with them. There are two ways they can do this. They may be able to extend the term out for a period of time so you can find other options. Or you might get them to refinance the balloon payment down to monthly payments. Many times these monthly payments will be less than what you have been paying previously. This is the best way if they will work with you.

2) If you can’t work something out with the current truck lender consider calling your credit union. If your not a member go see one. As I have mentioned in previous articles credit unions are one of the most aggressive sources when it comes to semi truck financing. Remember, you have two things going for you. First, you should have some equity in the truck. You have made payments for many months so there should be good equity. Second, you have a payment history (hopefully on time) and lenders like that.

3) Call an independent semi truck financing company. There are truck lenders that cater to all types of credits. We handle customers that have less than perfect credit history. There are companies that handle the good credits as well. You can find these companies online or call up your favorite truck dealer for ideas.

4) Turn the truck into the financing/leasing company. Many times the residual payment is set up in such a way where they give you credit for payments made and you can swap out the truck for a newer one. Not a bad deal if you don’t mind continuing making a monthly payment. Maintenance, repairs, and insurance can sometimes be a part of these agreements so they’re not a bad deal. Just be sure you read the fine print to be sure your covered on all the particulars.

5) If you are good at budgeting and you are aware of what the amount of the residual payment will be from the start of the agreement you can break up the balloon payment by the number of months in the agreement and just sock the money away each month. Sounds like a simple solution but we don’t think of these things when working out our monthly budgets. The residual payment is an expense in the future so we don’t think about it today. But, say for example you know you will have a residual payment of $20,000 at the end of 36 months, you would just break that down monthly and set aside $556 per month. When time to make the payment, your covered.

Too bad they don’t teach money management in truck driving school. But with a little planning a head of time you can avoid a headache down the road. If you do get caught in a pinch there are other ways to attack the problem. If you have any questions or want to run a scenario by me just give me a call. Happy trucking.

Here are five things to consider when obtaining 18 wheeler financing:

1. Purchase From A Dealer Or Private Party – With all the classified ads online, truck auctions, Ebay, etc it becomes very tempting to purchase your truck and trailer from a private party. This is fine if you have your financing in place but if you need need financing this can become complicated. Most sellers won’t help you finance the truck and trailer. This leaves you to shop separately for financing. Also, many independent financing companies wont do private party sales. I don’t want to discourage someone from going this route. Just be sure you have your financing in place before shopping. It will save you loads of aggravation.
2. Funds Dispersement – When purchasing an 18 wheeler your buying a truck and trailer. If your buying the truck at one dealer ship and the trailer at another the bank providing the financing will have to cut two checks. This sounds like it wouldn’t be an issue but some banks have a policy where they will only cut one check per approval. We have had customers come to us on several occasions looking for 18 wheeler financing because the bank they had an approval with wouldn’t do a multiple dispersement. Make sure the bank your working with understands that your buying two items when purchasing an 18 wheeler (you’d be surprised!).
3. Age Of The Truck And Trailer – This is important for a couple of reasons. From a financing perspective financing companies have age limits; some are five years, some are ten. This is another reason to get pre-approved before going shopping. Know what your bank will do regarding the age of the truck and trailer. Also, as you know, several states have implemented tighter age restrictions so it’s good to know that before selecting your next 18 wheeler.
4. Bad Credit/Start Up Owner Operator – Do you have credit issues? Are you a first time owner operator? If you have any issues that might hold you back from getting approved for 18 wheeler financing you are going to want to approach truck financing companies first before looking at trucks. You want to be sure you can get approved first before wasting your time. We have about 70% of our customers come to us first to get pre-approved before they shop for trucks. No reason to set yourself up for disappointment.
5. Do You Have Work For The Truck? – Sounds obvious but we get lots of guys looking to finance a truck that don’t have steady work lined up. They read a few load boards and they think it’s a path to riches. We have to educate these guys that success with Cdl Driver Jobs is more that just picking up loads here and there. Solid contracts with reputable companies are one of the best indicators of your success in this business. Your focus should be on having “relationships” not “loads”.

As you can see there are many things to look out for when looking for 18 wheeler financing. Do your homework. It will save you headaches down the road and better your chances of success. If your looking for commercial truck financing check out the rest of our site. Happy Trucking!

How many times have I heard the story of somebody goes shopping for a truck they find the perfect truck for their trucking business and they negotiate the paperwork, hours go by and they sit down to sign everything and all of a sudden the numbers are different. And perhaps the most important reason here why somebody would want to get pre-approved is bargaining power. When you walk into a truck dealership with an approval letter in hand you could have a heck of a lot more bargaining power then if ou’re just going willy-nilly specially if you know your credit is not good and that might be the case if you’re reading this. Get pre-approved first and you could have a lot better leg to stand on when it comes to negotiating.

How to get preapproved, what’s the best way to go go about doing this? First off obviously contact your bank. Again many people are having a hard time getting approved through traditional banks if your credit is less-than-perfect. Then you can have an even harder time never to go through truck publications like truck paper you’re cruising on the Internet to try to find independent truck financing companies. Again we are one of those.  Credit Unions are are becoming a stronger force again in the semi truck financing market. They were strong before the recession, they died off like everybody else during the economic downturn and they are coming back strong again. Yes they are my probably my number one competition and if you get approved at a credit union, take the approval. You will get better terms than most banks and financing companies will give you.

Again, it’s a good idea to get pre-approved when shopping for trucks. I hope this shed some light on that. Happy trucking and talk to you soon.

Here’s a transcript if you want to read it:

Hello. My name is Jason Dasher, with Capital Solutions. Today, we’re going
to talk about paying off a truck lease. We get many requests for this sort
of thing every week. A guy has leased onto another company, and he wants to
pay the truck off so he can drive elsewhere. The main motivation here is to
drive for another company. There’s many reasons for that, which we’re going
to go into right now.

Why would a guy want to do this? Why would he want to pay the truck off
where he’s at? What are the motivations behind that? The first reason that
we find a guy wants to pay his truck off is that he’s not getting enough
miles from the company that he’s driving for, and he’s not going to get
enough money. He wants to get rid of the company he’s signed on with right
now and go drive for another company. Many times, the expenses with his
current company are eating into his revenue too much, and his net income
from the company is not sufficient, so he wants to make a move. They’re
making decent money, but they could make more elsewhere. A lot of these
guys get a great contract, but they’re signed on with this other company,
so they want to cash out their current truck and take it to somewhere else.
Of course, there’s lots of other reasons: Many times a guy is offered a
contract, maybe to drive locally or regionally, so he’s home every night.
Sometimes he’s not happy, personalities clash, or something like that, but
he still wants to make the move.

The amount of money owed on the trucks is often too high. He doesn’t have
$10,000 or $20,000 lying around, so he needs commercial truck financing.
How do you get that kind of financing? It’s not like a truck purchase where
you get financing through a dealer or something like that. There’s not very
many companies that will do this sort of thing, so it’s a bit tough. Yeah,
a lot of these guys’ credit isn’t so good, so that makes it even more
difficult.

Some possible solutions to this, we’ll talk about right now. The first
thing you want to do to get prepared for this is to get a payoff on the
truck, and if it includes the trailer of course, find out exactly what’s
owed on the truck and trailer so you know what you’re dealing with. Get a
realistic value on the truck. Think in terms of a buyer, not a seller. You
want to think bottom number, so again, you go in prepared and educated;
you’re not looking too optimistic to the bank. The more equity, the better;
lenders love equity, so if you got a big spread between the value of the
truck and what’s owed on it, you’re in a better position.

First step is to contact your banker. You’re showing a payment history. A
lot of them won’t do semi truck financing, but if you show that kind of
payment history, if you’ve got the equity, they may turn around and do it.
Contact a credit union: Credit unions were very strong for different types
of commercial truck financing in the past. The recession softened them up a
little bit, but now they are starting to come back around. I encourage you
very much to . . . even if you’re not with a credit union, go open a small
account and get a relationship going with them. They’re my worst
competition; let me put it that way. They’re working with guys with soft
credit, and they’re coming back as a force in the semi truck financing
industry, so check that out. That’s good advice right there. If all else
fails, or if you have other motivations, call independent truck financing
companies, which we are one. There are others out there. I know of 3 or
independent commercial truck financing companies that will do this sort of
thing. Give them a call, and you could maybe get something done that way.

If you are having a tough time getting financing somewhere, the first thing
to do is maybe pull in a co-signer with good credit, hopefully in the
trucking industry, and maybe that can get the deal done. Buying the balance
down: As an example, let’s say you owe $20,000 on the truck. If you have
$5,000 you can put towards that, now you’re financing $15,000, and that’s
another way of making the deal sweeter to the bank. Of course, additional
collateral: This falls into our category. If you have a weak credit
profile, putting some other trucks or equity in real estate or heavy
equipment on the line, in addition to the truck might get the deal done, as
well.

Success; what is success, and how does it happen? If you have, again, lots
of truck equity, that’s really good, or good credit will help you get
success on this. Strong co-signer; we talked about that before. Having a
good, strong co-signer will better your odds, if you need one. Of course,
additional collateral.

To get it done, if you have any questions, give me a call; the number is on
the screen. Even if you don’t have collateral but you want to talk to a guy
that’s been through the process 100,000 times, and I’ve certainly talked to
more people than that, if you want to bounce some ideas off me, give me a
call, and perhaps I can help you.

Good luck with your trucking business out there. Let me know if we can help
you.

Getting declined in this post-recession economy, lenders, as you already
know, have tightened up. So they’re really looking through a magnifying
glass and looking for, I don’t want to say reasons to decline a deal, but
they’re being more particular.

Low credit score is the obvious one. Different lenders have different
thresholds. I’m hearing 675 to be the most common one, but there are
certainly other ones. I’ve heard as high as 725, which seems crazy to me.
But low credit scores are the number one reason people get declined. That
threshold has gone up since the recession.

Poor debt-to-income ratio, you see this on more expensive transactions
where the lender wants to see how much income you have to how much payments
you have going out there every month. Obviously they’re looking for as much
income coming in as possible relative to the payments that are going out
every month. So the greater that ratio the better off you are.

We get a lot of people that call us, they’ve been declined, they have great
credit, credit scores are high, but the last three months, for whatever
reason, their income has tapered down. So it throws that debt-to-income
ratio off, and they can’t get approved. Time in business, two years is
generally the norm for most truck lenders. If you don’t have that time in
business, that can be an issue.

Past serious credit derogatories, obviously bankruptcies, repossessions,
tax liens, slow pay on mortgage, which is a common one now, and
foreclosure. These are the common reasons people get declined and there are
ways of working with this. It won’t help every single time. But we’re going
to get into that, how to maybe come back to a lender. Or, preferably, if
you know you have these derogatories, or these problems, going in, you
address them going forward.

What we can do about it is address the issues up front. That’s the best way
of doing it. If you know you have a low credit score or you don’t have the
time in business, or something like that, if you have access to a good
credit co-signer – preferably one that’s been in the trucking business for
a while – go into that from the beginning. Obviously you want to try to go
in without a co- signer. But if you really need that truck, and you’ve
already been declined by other dealers, etc., then take that co-signer in
on the first pitch and get the deal done. That’s one way of doing it.

If you have debt-to-income ratio problems, you can redo your profit and
loss statement. Obviously, don’t lie. But you can shift things around with
the aid of an accountant or if you know what you’re doing, you can do it,
and you can make that P&L a little more pretty.

Explanations of past credit issues, good one. A reason people have bad
credit, they had a health issue. They were sick or something and that took
them out of the game for a period of months or something like that. A
letter from a doctor, believe it or not, going in with the initial
application, is a good way of addressing up front by saying, “Hey, listen.
I’ve had this issue. I’m bringing it up from the beginning, and here’s a
letter showing that I’m not B.S.-ing you and this explains why I have
this.” It works for past repossessions, past slow-pays, especially on truck
payments, etc. So there are ways to address it. Not every lender is going
to buy it, but it ups your chances.

Additional collateral, which is, of course what we do. If you have any of
the before mentioned things, bringing additional collateral to the table
can help overcome almost all of these things. That could be other
commercial trucks you own, heavy equipment, or real estate.

I think that covers it. I am Jason Dasher with Capital Solutions, if you’re
watching this on YouTube, our web address is down there. You can clink on
it. I’m still learning this video thing. You can go to our website if you
want to learn more about what we do, or give me a call. Even if you don’t
have additional collateral, but you want to bounce some ideas off of me,
give me a shout and maybe I can steer you in the right direction. Good luck
out there. I hope all goes well. Thanks.

1) Fill Out The Application Completely – This sounds obvious but you would be surprised to find how many incomplete applications we get here at Capital Solutions Truck Financing. It sends bad signals to the lender. First the applicant looks lazy. You can’t take the time to fill out a short application. Are you this lazy running the rest of your business. Second, it could suggest your trying to hide something. The “Bankruptcy Yes/No” field is blank. Are they hoping we won’t find out? Banking information is left out. Do you not want us to know about the 57 bounced checks? Again, this one is easy but make sure you go through the app completely so you don’t mistakenly leave something out.

2) Supply Additional Info (References) – Have a separate sheet explaining the company your hauling for or the company you just signed up with. The lender likes to know what your going to be doing with the truck and, perhaps most important, they appreciate you taking the time to supply this information. Have it written up before you arrive to do the application that way you can just include it with the main application. It’s also important to include other prospects you might be able to drive for. A lender likes to know their customer has other ways of putting that truck to work. This way you don’t have all your eggs in one basket.

3) Supply Additional Info (Past Borrowing) – This is already a part of most applications but the information requested is limited. Write up a separate document explaining past semi truck financing you have done. Include the following: Name of the lender, amount borrowed, monthly payment, term of loan/lease, date originated, date paid off, number of late payments. Yes, I said late payments. Let the lender know your upfront and honest. They are going to find out anyway. Tell them the months your were late and why this happened. This is very important.

4) Supply Additional Info (Personal Bio) – Add a personal element to the application by letting them know that there is real person applying for financing; not just an application number. Here you can talk about being married or single, kids, hobbies, where your from, organizations you belong to. It helps paint a picture to the underwriter of who they are lending money to. I can tell you having been an underwriter for over 15 years if I have two identical applications and one supplies a personal bio, I’m going with that guy (assuming his bio is positive of course).

5) Counter Offer – If you get declined from the lender you can approach them with alternatives to try to change that decline into an approval. For example, offer to increase the down payment, offer some additional collateral (another truck title), offer a cosigner, etc. This can turn things around. It also shows the lender your resolve in getting things done. This is all important stuff to an underwriter.

Filling out a credit application is more than just filling in little boxes. It’s your only chance to let the lender know who you are. Put your self out there completely. Think of it as a resume. It’s your only chance to make a good impression. Good luck!

We are seeing our customers get more contracts and contracts that pay, on average, better than over the past couple of years. This is a sign of companies shipping more products and retailers, etc selling more goods. This is all a positive sign that our industry will gain strength into the new year.

We are also seeing truck values stabilize and hold their value since 2009. This debunks the myth that the spike we saw in truck values after 2009 was a “fluke” or a knee jerk reaction to a short truck supply. With truck values holding strong and increasing this shows that the demand for commercial trucks continues to be strong.

We here at Capital Solutions look forward to helping those of you with past credit issues acquire the trucks you need to help start or grow your business to meet this increasing demand. We would like to wish all of you a profitable new year and continued growth.

Capital Solutions gets around the obstacles of offering big truck financing to individuals with bad credit by having them put up free and clear titles on any existing heavy trucking equipment, or equity real estate they may have. If the applicant doesn’t have any existing collateral, the collateral of a cosigner can also be used. This simple solution solves a key problem for getting that big rig back on the road.

Completing the transaction of truck financing takes about a week from start to finish, when collateral from trucks or equipment is used. When real estate collateral is used for the truck’s financing, it generally takes two weeks to allow time for transfer of the title.

As you can see the steps are easy:

- Apply for big truck financing
- Put up collateral on heavy trucking equipment or real estate
- Wait 1 to 2 weeks for transfer of titles
- Get back on the road with your newly financed big rig

Bad credit shouldn’t stop you from getting back to work. Get back on the road today with a collaterally financed package.

Capital Solutions feels they are a good match as they are also in the business of helping truckers with bad credit get financing for the trucks they need to purchase. You can visit Trucker Charity at www.truckercharity.org.

First the major truck manufacturers started ramping up production after the recession. While this hasn’t seemed to hurt trucks that are newer than, say 2002 it has had a major impact on trucks older than that.

Second with the various states imposing restrictions on older trucks the value of these trucks naturally would go down.

As a result we have tightened up financing trucks older than 2002. It’s not that we wont do them but we are looking closer to the whole deal to make sure it makes sense.

On the up side the value (and prices) of newer trucks continues to remain strong. You can buy with confidence that truck values are stable and your getting what you paid for.

Please visit our truck financing page if you would like any information our our program.