Tractor-trailer financing

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    Chris Godfrey

    Page written by Chris Godfrey. Last reviewed on July 11, 2024. Next review due October 1, 2025.

    It doesn’t matter if you’re an owner-operator, a small fleet owner, or a large fleet organization, it rarely makes sense to pay for expensive commercial vehicles with cash. Instead, tractor-trailer finance lets you pay for the truck as you use the truck and gives you better control of your working capital. Expand your trucking business without hurting cash flow.

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      What is tractor-trailer finance

      Tractor-trailer finance– also known as equipment financing – is a special type of business loan used to support the purchase of new or used tractor-trailers. 

      How does tractor-trailer financing work?

      There are two types of tractor-trailer financing:

      Finance (also known as a tractor-trailer loan)

      Tractor-trailer finance is a straightforward business loan. You make a down payment on the vehicle and then pay off the balance of the purchase price, plus interest, with regular payments over a fixed term contract. The tractor-trailer acts as security for the loan. When the agreement comes to an end, the truck is paid for and yours to keep. 

      Advantages of a tractor-trailer loan:

      • Own the tractor-trailer outright when the contract ends
      • Add the vehicle as an asset to your balance sheet from date of purchase
      • Utilize Section 179 tax benefits to lower your tax burden

      Disadvantages of tractor-trailer loan:

      • Higher monthly payments because you are paying back the total price of the truck


      A tractor-trailer lease is really a long-term rental agreement. Because you are only financing some of the purchase price, leasing typically has lower monthly payments than a finance/loan. With a lease, you make a down payment and then pay a regular sum plus interest each month to use the vehicle. At contract end you can either give the tractor-trailer back to the lender, renew the lease at a different cost per month, or buy the truck for the fair market value – this is commonly known as a ‘balloon payment’. 

      Advantages of a tractor-trailer lease

      • Lower monthly payments
      • Options to buy the vehicle or lease a newer truck at contract end can give you better financial flexibility and/or a more modern tractor-trailer

      Disadvantages of excavator lease:

      • Balloon payment could be more than the truck is worth at contract end
      • Becomes a liability on your balance sheet

      How do I finance a tractor-trailer?

      Whether you’re buying new or used and from a dealer or a private seller, there are several ways to finance your next tractor-trailer:

      • Financing from the dealership that sells you the truck: This is certainly the most convenient financing option, but you will probably need strong credit to qualify. Be aware that dealership financing can often come with higher interest rates than other loan options. You may also be able to get a better discount on the truck’s sticker price when you have your own financing deal in place – basically, you have the same leverage as if paying for the tractor-trailer with cash.
      • Banks and credit unions: A personal or business loan from a bank or credit union may come with the most competitive rates, but typically, these lenders have rigorous qualifying rules and usually want to see that you have been trading profitably for several years. Getting tractor-trailer finance from a bank or credit union may also take several weeks to complete.
      • Online lenders: These type of lenders tend to have more relaxed qualifying rules and will accept borrowers who have younger businesses. Applications are typically streamlined and will often give you an approval the same day, sometimes in just a few minutes. However, because they carry more risk by approving more borrowers, online lenders usually charge slightly higher interest rates than banks and credit unions.

      How to find the best tractor-trailer finance:

      Getting the best tractor-trailer finance can pay off with lower rates, lower fees and less application hassle. However, you need to do your homework to get this goldilocks combination. This means shopping around for different financing offers before settling on a deal. You can do this by approaching banks, credit unions and online lenders one by one, or you can use the services of a loan marketplace that will introduce you to a choice of tractor-trailer financing deals from different lenders. Some marketplace platforms can also give you advice and help you with the application process. This can be especially useful for business owners who have never had tractor-trailer financing before. 

      What you’ll need:

      • Vehicle details including price and details of seller
      • Your business details and financial records as required
      • Preferred type of financing – loan or lease
      • Contract length request

      How long can I finance a tractor-trailer?

      Finance contracts can run anywhere from 12 to 72 months, but you should set the loan term for a duration that suits your business strategy and your financial strength. Keep in mind that a longer term will give you lower monthly payments, but you will end up paying more interest over the duration of the contract.

      What credit score do I need to get tractor-trailer finance?

      Every lender will have their own documentation requirements, but standard finance application paperwork includes:

      • Tractor details including price and details of seller
      • Your business details and financial records as required
      • Preferred type of financing – loan or lease
      • Contract length request

      What credit score do I need to get tractor-trailer finance?

      Most lenders will want a minimum personal FICO score of +640, although with some online lenders, it may be possible to get tractor-trailer finance with a score in the mid-500s

      Can I finance a tractor-trailer with bad credit?

      Even if you have bad credit, or have been turned down elsewhere, it may still be possible to get the tractor-trailer finance you need. However, if you’re not sure you will qualify and want to avoid unnecessary disappointment, call Swoop today to discuss your situation with a bad credit expert. 

      Top tip: If your business has any of these attributes, bad credit problems can often be overcome:

      • Large down payment
      • Lengthy time in business (5 years or more)
      • Extra collateral
      • Good cash flow
      • Co-signer with good credit

      Important note: Lenders will typically want a bigger down payment and charge higher interest and fees on tractor-trailer finance for borrowers with weak credit.

      What is the interest rate on tractor-trailer finance?

      Interest rates on tractor-trailer finance can vary from 5% to 35% but the actual rate you pay will be determined by factors unique to your business – credit risk, length of time in operation, financial history, annual turnover, etc.

      Get started with Swoop

      Working with business finance experts can make all the difference when applying for tractor-trailer financing. Contact Swoop to discuss your borrowing needs, get help with your application and to compare top-quality tractor-trailer financing from a choice of lenders. Get the rig you need without putting strain on cash flow. Register with Swoop today.

      Written by

      Chris Godfrey

      Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.

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      At Swoop we want to make it easy for SMEs to understand the sometimes overwhelming world of business finance and insurance. Our goal is simple – to distill complex topics, unravel jargon, offer transparent and impartial information, and empower businesses to make smart financial decisions with confidence.

      Find out more about Swoop’s editorial principles by reading our editorial policy.



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