Applying for truck trailer financing in Mississauga is not the same as applying for a conventional business or personal loan. Even though there are similarities, a lender usually relies on the credit history of the borrower, the revenue of the business, and how long they’ve been operating to determine if they are eligible for financing or not. However, with a commercial truck trailer loan, the truck or trailer you decide to purchase for your business will serve as collateral which minimizes the lender’s risk, and, most importantly, improves your chances significantly of qualifying. When it comes to commercial truck loans, there is usually a lot of variations and flexibility, which can work in your favour. Additionally, it also depends on the type of model of truck or trailer you want to purchase along with several rules and regulations of the lending companies you approach. Regardless, there are several basic guidelines you will need to follow to significantly improve your chances of getting your truck trailer financing approved.
1. Credit score: A major factor in truck trailer financing
The general rule of thumb is that the weaker your credit score, the greater amount of down payment you will be asked to pay. Being a first-time buyer, your credit score and history will directly impact your chances of qualifying for truck trailer financing in Mississauga. Even if you have a great credit score, there is no guarantee that you will easily secure financing, but you will be able to negotiate better repayment terms which will help you potentially save a large sum of money in the long run.
2. What is the down payment you are willing to make?
When purchasing a truck, most lenders will require a fixed percentage of funds upfront. The down payment amount can vary from anywhere between 10-30%. For example, if you take out a loan for $80,000 with a 15% down payment, the down payment amount you will need to make is $12,000.
3. Other considerations that affect interest rates:
While having a good credit score is important, there are other factors that lenders look for before approving truck trailer loans. Your aim should be to reduce as much risk as possible in the eyes of potential creditors. Below-mentioned is a few suggestions:
- The more experience you have in driving trucks or trailers, you can show a constant revenue stream from it.
- If your credit history in the last seven years has been good, it will bode well in the eyes of the creditors and significantly help with the loan approval.
- If you have a credit history where in the past, you have honoured your fixed payments at regular intervals, it can be very beneficial.
- Identify a co-signer who can be either a relative or friend that has a good credit rating.
As long as you meet the needs and requirements of the lenders, it is essentially straightforward. However, if at this particular moment in time your credit score needs improving, you can follow the above-mentioned steps to improve your credit score and get approved in no time.
For further enquiries on truck trailer financing in Mississauga, please do not hesitate to reach out to the experts at Top Link Loan and Leasing. Contact our team today to apply or to schedule an initial consultation.