7 Things to Know About Semi-Trailer Financing [+ Alternatives]


Trucking companies are an integral part of every supply chain, no matter how big or small. As the expectation for faster turnaround and shipping times increases, so does the workload for truckers.

It’s the perfect time to start or expand your own trucking company. Business is booming, with no sign of slowing down on the foreseeable horizon.

Whether you’re currently a driver ready to strike out on your own or you want to turn your few trucks into a fleet, you need working capital. Chances are, the first thing you think of is getting a loan, but that’s not always the best option.

This guide will walk you through the basics of getting financed, including tips on who to trust and how to avoid scams. We’ll also give you some alternative semi-trailer financing avenues so you can choose the one that’s best for your unique situation.

1. How to Start Your Financing Journey

So you want to build your business. You have all the ideas, goals, and passion, but you’re just missing the cash to make it all a reality.

The good news is that there are thousands of reputable companies ready to back your dream if you know where to find them.

The bad news is that there are also lots of people waiting to scam you out of your money. When they can charge you a massively high-interest rate, it’s easy to find someone willing to give you money, even if you have bad credit.

We’re here to help ensure you don’t become a victim to these lender predators. They look reputable, but the fine print they try to slide your way says otherwise.

How to Shop Smart for Financing Solutions

In this section, we’ll give you some tips to get you started with legitimate tractor-trailer financial lenders. No matter how excited and ready you are to get started, read through these words of wisdom first.

Know Your Worth

What do you know about your personal and business financial history? When was the last time you sat down with your credit report and analyzed each section the way a potential lender would?

That’s exactly what you need to do before you start applying for loans. You might think your financial picture looks a lot different than it actually is on paper.

When you know factors like your credit scorecredit history, and credit utilization, you can predict what you’ll qualify for more accurately.

There are lower-interest loans available for startups and small businesses. They’ll tell you point-blank that you need at least a minimum credit score (usually 700).

Do you have the stringent credit history and criteria requirements to apply for them?

Should you take the average interest rate or keep shopping around for the best rates because you have good credit?

Part of your value as a potential client is how smart you are with your finances and how serious you are about your business. You prove this with the down payment you’re willing to put toward your loan.

The larger the amount you’re investing in your business, the better terms you’ll qualify for. If you don’t plan on investing much (or any) of your own cash into starting the company, you’re considered a higher risk to lenders.

Recognize Your Timeline

Another factor that will impact the financing you should aim for is your timeline.

How quickly do you really need the funds?

In short, do you need the money fast, or can you afford to take your time and shop around?

You may be in a hurry to get started, but unless there’s a ticking clock hanging over your head, it’s best to be patient. If you found a deal on a semi that’s almost too good to be true (going out of business sale: 50% off a brand new truck!), it’s a legit reason to be in a hurry.

Otherwise, take your time, develop a business plan, and connect with multiple lending sources.

Stick With Known Lenders

We’ve gotten so used to instant gratification that we see filling out forms and waiting for approval as an unnecessary hassle.

But that’s the way known lenders like your current bank, credit unions, SBA loans, and reputable financing companies work.

Yes, there are companies online that offer legitimate financing. However, if you’re never heard of them, tread cautiously. Cybercrime is a serious problem, and cybercriminals know the tricks to look like the real thing.

Some (but not all) of the warning signs to be alert for include:

  • Lenders who aren’t interested in your credit score or have a very limited credit application
  • Requiring money upfront before performing any services (usually disguised as a fee)
  • Wire transfers of any kind
  • Offers over the phone (this is illegal)

Even more dangerous is the practice of using copycat names.

You’ve seen this in your emails when someone claims to be from Amazon, PayPal, or another major company. Your account is frozen! Someone tried to break in! They need your password/bank account/payment now!

Anytime another party is in a hurry to get your information, stop and check them out in detail.

Related: What You Need to Know About Trucking Business Loans

2. Consider These Semi-Trailer Expenses

Now that you know how to approach getting tractor trailer financing — hold on! You’re not quite ready yet.

First, you must strategize how much of a loan you should ask for. Too much money and you’ll be paying interest for funds you’re going to end up squandering. Too little, and you’re setting your business up to struggle early on when it needs help the most.

Trucking Business Essential Expenses

In addition to the commercial truck itself, you’ll have other cash flow needs.

As an owner-operator, keep in mind that you’ll need to set aside working capital for these essential expenses:

  • Maintenance and repair (this can be pricey for big rigs, especially if you have a reefer)
  • The cost of driving, such as fuel, tolls, and employee salaries
  • Initial and annual documentation (e.g., CDL renewals, licenses, permits, registration, renewal fees, inspections)
  • Insurance policies such as auto, health, disability, life, general liability, etc.
  • Taxes (payroll, self-employment, income, road use, fuel)
  • Professional services like brokers, attorneys, and subscriptions

As a big rig owner-operator, you’ll probably be invoicing most of your customers. Having a fintech company to partner with, like Now, is a way to get working capital quickly when you’re short on cash flow.

Now gives you the cash you need for services you already performed. For a small fee, you can cover all the unexpected expenses that crop up as you’re growing your business. We’ll explain in more detail when we talk about invoice acceleration below.

3. In a Rush? These Fast Financial Options Might Be for You

Small piggy bank on top of a stack of quarters

Qualifying for a bank loan usually requires strong business and personal credit. It’s a lengthy process that isn’t for everyone.

If you’d prefer another route or can’t get approved through a bank, you still have options.

Fast Funding Avenues

Yes, you should be aware that scammers love to prey on people who are desperately in need of quick cash. But there are also legitimate companies and financial avenues to help people in this target market.

When you can’t wait or don’t have the credit history to get approved through traditional lenders, here are some alternatives.

A Business Line of Credit

A business line of credit works like a credit card. You take money out when you need it and pay it back in installments.

The total amount borrowed is due at the end of the term. These financial solutions often have higher interest rates and more fees involved.

Equipment Financing

Equipment financing is a favorite for semi truck financing, but it doesn’t cover other business needs.

It’s easier to qualify for this type of loan because the equipment is the collateral. Keep in mind that if something causes you to default on the loan, you can lose your entire business if they take the truck back.

Short-Term Loans

Short-term loans are popular for people with bad or no credit. They’re easier to qualify for because the interest rates are higher.

However, there’s usually a cap on the amount you can borrow because they expect you to pay it back quickly (within six months to one year). If all you need is a little cash to get by and you can’t use invoice factoring to fall back on, a short-term loan may help.

Avoid merchant cash advances (MCAs) unless you’ve exhausted all other alternatives. The interest rates on these can be over 90%, and payments are automatically taken out of your daily credit card receivables.

Related: 5 Things to Know About Small Business Loans

4. Time on Your Side? Check Out These Loan Alternatives

As we mentioned, patience is a virtue that pays off substantially when it comes to financing.

If you can wait, try these solutions.


Small businesses have grant options with the government and private entities that want to help you succeed.

A grant is money that you usually don’t have to pay back. Trucking businesses are an essential part of the entire economic supply chain, so you’re in demand.

Instead of truck loans, look for grants from the USDALISC, and the federal government. The only drawbacks are you must use the funds in a specific way (usually to pay for your business, so that’s fine), and the applications can be time-consuming.

Invoice Acceleration

If you’re already doing the work but waiting on invoices to be paid before you can grow, consider invoice acceleration.

With this type of financial solution, no loans and monthly payments are necessary. The money is already yours; you’re getting it before the client pays, minus a small fee.

It’s the perfect way to free up cash and capitalize on a good deal when you see one. And unlike with a loan, your credit history isn’t scrutinized because it’s the person who owes the invoice that will be paying.

5. What to Expect With a Reputable Lender

Young African-American woman smiling

Every financial solution has its own unique qualification process. But a reputable lender will want some evidence that you’re creditworthy and worth the risk.

Typical qualification requirements for a loan as significant as buying a truck include:

  • A credit score check
  • Time in business
  • No bankruptcies in seven years
  • No unresolved tax liens
  • Possibly a personal guarantee

These requirements may be a challenge or an annoyance. Still, they’re excellent signs that the lender is reputable. With so many scammers out there, sometimes, the more hurdles you have to jump for approval, the more legitimate the company is.

How to Check a Company’s Legitimacy

Some scam companies aren’t easy to spot. Here’s an example: PayPal/PayPaL.

Do you see a difference?

In the first one, the “l” is a lowercase L, the way PayPal writes its name. In the second one, the “l” is actually a capital “I.” They look identical, but one is a copycat trying to scam you out of your money.

Before you give any of your personal or business information, check the company out.

Look for details like:

  • Their physical address on their documentation (is it valid when you search it on Google?)
  • A transparent list of fees
  • Payment methods (no legitimate lender will ask you to send a wire transfer or prepaid card)
  • The company is registered by the FTC (Federal Trade Commission) to do business in your state
  • The lender, address, and phone number are available on the Better Business Bureau’s list and they have a good reputation

Taking five minutes to do some homework upfront can save you endless hours of stress and, more importantly, your money. It’s usually apparent whether a company is legitimate or not by the time you make it through this list.

6. What About Startups?

Instead of expanding, you’re starting out. You know the business, and you want your share of the entrepreneurial pie.

As a startup, your options are a bit different. Your focus should be on finding lenders who want to help entrepreneurs.

Common Lenders for Startups

Your financial solution could be as simple as your background. Some small business loans and grants have qualifications as simple as “starting a business” and meeting a certain status.

Do you fall in the “minority” or disadvantaged business enterprise (DBE) category? Are you a veteran?

If so, you’ll be eligible for grants and small business loans through the government.

Equipment financing is also a common avenue for startups to take. Since the equipment is the collateral, lenders are more likely to approve most borrowers.

Finally, you can look into angel investing. Angel investors are smart enough to realize that the trucking industry is crucial to every business sector. They invest in startups, but they often take anywhere from 20 to 50% of ownership. If you do look into angel investing, have legal help as you negotiate and structure the deal.

You may also like: How to Get Certified as a DBE/Minority/Female Owned Business in Georgia

7. One Last Thought: Buying vs. Leasing

Semi-trailers can cost more than a house, and if you’re trying to build a fleet, you want the best deal for your money. Financing options abound, but other considerations might be better.

Buying, Leasing, or Renting: Which One is Better?

Before you invest in your next commercial vehicle, whether you need dry vans or box trucks, ask yourself if buying is your best option.

Financing Pros and Cons

Financing is always preferred because the truck is yours at the end of the loan.

On the other hand, a loan as hefty as commercial truck financing can take decades to pay off.

Will the truck last as long as the loan?

Advantages of Leasing

Leasing is another alternative. Your upfront costs are lower when you lease, and the rates are usually better. You also have the peace of mind of knowing that there’s an end in sight if you’re not fully satisfied with the truck.

If you choose to buy it when the lease is over, you have that option. The downfalls are that you may be limited on mileage and responsible for any damage to the vehicle when the lease ends. You’re also putting money into equipment that you might never own.

What About Renting?

Renting is a temporary solution for those who need a vehicle fast and don’t want to get stuck with a high-interest loan. It’s also beneficial if you only need a special kind of trailer to do a short-term job.

It can be advantageous if you choose to rent, especially if you’re dealing with a seasonal rush or are in between leasing or buying cycles. The upfront costs are inexpensive, but the equipment gains no long-term value.


The trucking industry needs entrepreneurs like you who are willing to take a risk. But you need working capital to get started.

You have plenty of financing specialists at the dealership and online ready to get your business. Whether you need to borrow money or you already have untapped resources at your disposal is the question.

This guide clears up the mud around financing programs. With the path ahead clearer, you can decide if you truly need a loan or if working with a fintech company like Now is the best way to move forward with your trucking company.

Ready to get see how Now can help you? Set up your NowAccount to get started.