Saturday, May 11, 2013

Commercial Financing With Bad Credit | Your Ezbukz Blog

Before you jump straight into starting a trucking business or venturing into this highly competitive field, find out what commercial financing is all about and what it means to you and your company. At some point, you will want the independence and freedom, not to mention the profits that go along with owing your own company. There are many factors to consider if commercial truck financing will be the best avenue for you. Your goal is ultimately to be successful.

In commercial truck financing or heavy truck financing, keep in mind your cash flow. Your down payment will make the payments lower and more affordable. This is security for the finance companies, which they need to be comfortable with their investment. Some experts say to go into equipment purchase with little or no down. Your payments will be higher, but if something goes wrong in the industry, you won't lose your down payment invested. And it's possible you can recover lost cash by the sale of your equipment. As discussed previously, it is highly imperative that you have cash flow in your business. There will be the usual repairs, oil changes, and gas, to mention a few. These are things you need to be prepared to pay for, cash out of pocket. Credit cards can be used for these expenses, but again, you are adding to your monthly payments and may unknowingly be extending your budget parameters.

You don't want to jump into the trucking business with poor personal credit or excessive debt. Unfortunately, many commercial financing companies will get you into a new truck under those circumstances. This can ultimately kill your business before you even get started. Your spending habits rarely change so the outcome is you can lose your truck and even your business.

Being an independent owner operator, with your own truck and trailer, operating authorities, and insurance, comes with it's perks, but there's a lot of risk involved too. Slow customer payment is often the norm in the 'trucking industry'. Invoice factoring is a method used by some truckers and trucking companies to expedite payment.

You should keep this in mind a maybe opt for used truck financing instead of telling yourself you absolutely need that shiny new Peterbilt or Freightliner. What you should concentrate on is stability for your company to pay your monthly payments and still have cash flow for those necessities and emergencies. You need a good reliable truck, but it does not have to be top of the line, especially when you are beginning. Give yourself time to slip into the trucking business at a cautious speed and protect your company from failing before you even start. How much truck can you afford? What is the fuel economy of this particular equipment? These days with the high prices of fuel this is also something to be considerate of. Miles to the gallon can make a big difference in your bottom line.

So, when you are looking for heavy duty truck financing, do your homework, ask questions and be prepared to meet your responsibilities as an owner.

Source: http://ezbukz.com/consumer-finance-help/commercial-financing-with-bad-credit/

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