Auto Finance Options For Trucks And Commercial Vehicles

Although traditional auto financing companies do fund purchase of trucks and other commercial and industrial vehicles, it’s better to approach commercial truck financing companies. The biggest advantage of going for truck financing companies is that the loan can be customized. Trucking companies, fleet operators and freight hauling companies pay their loans from the cash flows generated by operating these vehicles. For industrial machinery operators, many a times a substantial amount of their cash flows are generated only when the project reaches certain milestone. These borrowers need customized loan products which traditional auto finance companies fail to provide. If the borrower has already secured a project with the payment schedule and cash flow projections, the truck financing company will work out a repayment schedule of the loan amount based on the projections.

For traditional fleet operators and freight hauling companies, business can be cyclical. Stated differently, they have irregular earnings with some months experiencing slow business compared to other months. In such scenarios, specialized lending companies provide tailor-made solutions-with a higher repayment schedule in months when the earning is robust and lower payments when earning is subdued. Another method of financing can be capital or sale-type leases, where the truck or heavy machinery is taken on lease against a fixed minimum lease payment(MLP) for short-period of time(36 or 48 months) and is sold back to the seller at a prorated discounted price, decided in advance. The bottom line is that it’s better to approach truck financing companies for specialized loans rather than traditional auto finance companies.

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