Best Semi-Truck Financing Companies in 2024

Updated 3/26/2024

Commercial truck financing enables motor carriers and owner operators to purchase a truck without paying the total amount upfront.

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It’s an effective and affordable way to scale up your business without tying up your working capital.

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Our guide below covers everything you need to know about commercial truck financing - including rates, requirements, and recommended lenders.

Smarter Finance

Call: (833) 513-2235 Get Quote

Direct Lender

No down payment options
24-60 month payment terms
550 credit score generally required

CAG Truck Financing

Get Quote

Direct Lender

Minimum down payment of $15k
Poor credit scores accepted but a down payment over 20% will be required

US Bank

Learn More

Bank

No blanket liens
Flexible payment terms
SBA loans available

Table of Contents

What is commercial truck financing?

How does it work?

Financing Rates

Truck Financing Calculator

Financing Requirements

Comparing Lenders

Top Lenders

FAQs

About the author

Kyle Fretwell has worked as a researcher and data-journalist for over a decade. His work has appeared in publications such as Bloomberg, Fox Business, MSN, USA Today, CNBC, and the Houston Chronicle.

He now manages TruckInfo.net's content team and is a regular fixture at the Mid-America Trucking Show in Louisville.

What is commercial truck financing?

Commercial truck financing is when a business owner takes out a loan to purchase a truck. In most cases, the truck acts as collateral for the loan.

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Financing vs Leasing

To understand commercial truck financing better, let’s take a look at the difference between financing and leasing.

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Financing

Key Features

Borrower takes out a loan from a bank, credit union, or other lender
Borrower pays a monthly/quarterly/annual repayment fee to pay off the loan
Borrower owns the vehicle

Pros

More affordable than buying vehicle outright
Cash can be used to purchase new or old vehicles
Interest and depreciation is tax deductible

Cons

Can be difficult to qualify for
Less flexibility for vehicle upgrades

Operating Lease

Key Features

Borrower pays a monthly fee to use the vehicle
Borrower does not own the vehicle

Pros

Easier to qualify for
No risk of ownership (repair costs, etc)
Can upgrade vehicles more easily
Simplified taxes (doesn't appear on balance sheet)
Classified as an operational expense and is tax deductible

Cons

Costs more over the long run

Other types of leases

Capital Leases or Finance Leases

Capital Leases - also known as “finance leases” - function similarly to loans but the trucking company technically doesn’t own the asset until the end of the lease agreement. This has accounting and tax implications so companies should speak to an accountant or tax advisor to see if this option makes sense.

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Lease-to-Purchase

A lease-to-purchase agreement is when an owner operator leases the vehicle from their employer and makes monthly lease payments before eventually owning the vehicle. These rarely make financial sense for drivers so be cautious and read the fine print before entering into this kind of agreement.

How does commercial truck financing work?

Commercial truck financing works similarly to other types of loans. The borrower provides a down payment to the lender, who provides the rest of the money to purchase the vehicle. The borrower then makes regular payments to repay the loan plus interest.

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Below we cover the main components of truck financing in more detail.

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Down payments

Down payments can vary widely, ranging from 0% down to 35%+ depending on the borrower’s background and the lender. However, most lenders require 10%-20% for borrowers with good credit.

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Interest rates

Rates are impacted by a number of factors including the federal funds rate, a company’s credit score, experience, business finances, and the type/condition of the truck.

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Fees

Lenders often charge fees in addition to interest to cover the cost of the application and administration.

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Fees can include:

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Application fee
Credit check fee
Appraisal fee

Ask your lender about the annual percentage rate (APR) of the loan to find out the actual cost of repayment. This rate will include any additional fees.

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Payment terms

Most lenders offer payment terms of up to 7 years but some will go up to 10 years.

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Banks and credit unions typically offer longer terms compared to other lenders.

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Tax Implications

Commercial truck financing has tax implications for your business.

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The interest on your commercial trucking loan is tax-deductible as a business expense.

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For companies using cash-based accounting, that means whatever you spend on the equipment in year 1 will be recorded as a business expense as well as the interest payments for the rest of the term.

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If your company is using accrual-based accounting, IRS Form 4562 can be used to claim deductions for depreciation. While depreciation is usually spread over multiple years, Section 179 allows truckers to record all of the depreciation in year 1 using Form 4562.

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Conventional vs SBA Loans

An SBA loan is a specific type of business loan that is backed by the Small Business Administration.

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Unlike conventional loans, the SBA guarantees up to 85% of the loan for loans up to $150,000 and 75% for loans over $150,000.

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Here are the top advantages and disadvantages of SBA loans:

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Advantages of SBA loans

Easier for businesses to qualify
Usually lower interest rates
Smaller down payments
Longer repayment terms

Disadvantages of SBA loans

Requires a personal guarantee from anyone who owns 20% or more of the business
Requires a strong personal credit score
Slower approval process

Commercial Truck Financing Rates

Annual interest rates can vary widely depending on the federal funds rate and the borrowers credit profile. While borrowers with great credit and trucking experience can sometimes find rates as low as 5%, those with poor credit may be stuck with rates as high as 30%.

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Factors that impact interest rates for loans include:

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Personal credit score – Your personal credit score will usually affect the interest rates lenders set for your loan. While it is possible to qualify with poor or average credit, the better your credit score, the better rates and terms you’ll be able to secure.

Type of lender – The type of lender you choose will also impact your interest rate. Typically, banks have the lowest interest rates and longest financing terms, but they usually require higher credit scores and larger down payments.
‍SBA backing – Regardless of the lender type, SBA loans generally have lower interest rates than other loans because the SBA guarantees the loan.

Truck Financing Calculator

Truck Financing Requirements & What Lenders Look For

If you’re applying for commercial truck financing, here’s how you can expect lenders to evaluate your application:

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Credit Score

Lenders will look at your credit score to assess your eligibility. If you have bad credit or no credit, this will usually affect the financing terms.

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Bad Credit

If you have bad credit, getting a commercial truck loan is still possible, but you may have a bigger down payment and a higher interest rate. You will likely need to work with an alternative lender and not a bank or credit union.

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No Credit

Like bad credit, having no credit history also makes you a high-risk borrower. You may still be able to qualify for a commercial trucking loan but the down payment and interest rate may be higher.

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Hard vs Soft Credit Pull

When you apply for commercial truck financing, the lender will do a hard credit check.

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A hard credit check generally happens when you apply for something - like a loan, credit card, or line of credit - and they appear on your credit report.

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A soft credit check has no impact on your credit score - this includes personal credit checks, as well as insurance applications, and employment applications.

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There is no limit to the number of soft credit checks you can have. But hard credit checks can lower your credit score.

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Having multiple hard credit pulls can be a red flag for lenders as it suggests that you might have an unstable financial situation.

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Keep this in mind when you’re applying for financing as hard credit pulls may affect your ability to obtain a loan in the future.

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Down Payment or No Money Down

Most lenders require a down payment but it is also possible to find lenders that don’t. If you opt for a no-down payment loan, you can expect a higher interest rate. No down payment loans are sometimes referred to as “100% financing.”

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Experience

Most lenders expect owner operators to have at least 2 years of commercial experience. If you have less than 2 years of experience, the down payment may be larger coupled with a higher interest rate.

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Business Finances

Lenders will evaluate your business finances, including tax liens, repossessions, or delinquencies.

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Collateral

In most cases, your loan collateral will be the truck itself. You may also need additional collateral to qualify. This could be business assets like an existing vehicle or property.

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Truck Requirements

Lenders will want to know the following info:

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Make
Model
Year
Mileage
Previous repairs
Value

Truck vendor

Who you buy your truck from could also impact your ability to get favorable loan terms.

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In many cases, it can be easier to get a loan if you buy from a dealership because the lender has more assurance of the condition of the truck.

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Commercial Truck Insurance

Commercial truck financing usually requires commercial insurance. This can include:

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Liability coverage (required by law)
Physical damage coverage
Bobtail insurance
Cargo insurance

Comparing Lenders & How to Get Commercial Truck Financing

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Types of Lenders

Banks & Credit Unions

Banks and credit unions tend to offer longer repayment terms and lower interest rates than other lenders.

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However, banks and credit unions are usually harder to qualify for than other types of lenders.

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Alternative Lenders (Direct Lenders, Online Lenders, etc)

Most alternative lenders specialize in equipment financing or helping borrowers that may not qualify for traditional financing.

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Borrowers with good credit will likely find these companies easier to work with than banks or credit unions and their rates can be competitive. These lenders can also be a great fit for borrowers with poor credit as they typically have lower qualification requirements. However, borrowers with bad credit should expect higher interest rates, fees, and shorter repayment terms.

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In-house Financing

While technically a form of alternative lending, in-house financing is unique because the truck dealership provides the financing. While it can be convenient and dealerships are more likely to fund borrowers with poor credit, it’s also coupled with higher interest rates and fees for those borrowers.

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Borrowers with a strong credit profile may find in-house financing to be a convenient option as long as the interest rates are comparable to other options.

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If you opt for in-house financing, make sure you are borrowing from a reputable company.

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First-Time Semi-Truck Buyer Programs

First-time buyers who may not qualify for traditional or SBA loans should start by looking into state-assisted programs like the California Air Resources Board (CARB) Truck Loan Assistance Program. These state-assisted loan programs can be a viable route for small businesses looking to purchase a semi-truck for the first time.

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When state-assisted programs aren’t available, alternative lenders can also be a great option. Many alternative lenders offer first-time buyer programs and some even offer 0% or $1,000 down payment programs. The rates for these loans will depend on your credit score, personal finances, past driving experience, and business plan.

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Financing Process

The financing process will vary depending on the lender and loan type but here’s what to generally expect:

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Applying for commercial truck financing

Before you apply for your loan, check your credit score and your business/personal finances to make sure you don’t have any outstanding tax liens or missed payments.

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Be prepared to provide details about your business:

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Business details (name, address, and phone number)
Business tax identification number (EIN number)
Nature of the business, date of establishment, number of employees
Net profit and sales
List of any outstanding debt obligations

Details about yourself or a guarantor:

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Personal information (name, address, contact)
SSN or passport number
Ownership percentage
Annual income
Residency status

And details about the vehicle:

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Vehicle type
Make
Model
Mileage

The lender will assess eligibility based on the information supplied and the process can take anywhere from 24 hours to several months.

Best Commercial Truck Financing Companies

Smarter Equipment Financing
_{Direct Lender}

Call: (833) 513-2235 Get Quote

Pros & Cons

No down payment options
24-60 month payment terms
Credit score requirement of 550

Overview

Smarter Equipment Finance is a direct lender that offers no down payment options to established businesses with strong credit (the typical down payment is 5-10%). Those with challenged credit may still qualify but those borrowers will have a larger down payment.

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Borrowers are generally required to have a credit score of 550, have 3+ years of driving experience, and have been in business 2+ years. Newer businesses can still qualify but will either need a credit score higher than 650 or be able to put down a large down payment.

CAG Truck Capital
‍_{Direct Lender}

Visit Site

Pros & Cons

Same-day approvals
No down payment options
No/poor credit options
Engine overhaul financing available

Overview

CAG Truck Capital is a direct lender that specializes in semi-truck financing exclusively. In addition to truck purchases, the company also finances engine overhauls.

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CAG can approve borrowers in as little as 24 hours. The company is willing to work with borrowers with great credit as well as borrowers with poor credit and even those that have declared bankruptcy or those with a tax lien. CAG will also finance startup trucking companies and is willing to finance high-mileage vehicles.

US Bank
_Bank

Visit Site

Pros & Cons

No blanket liens
No down payment options
Flexible payment terms
SBA loans available

Overview

US Bank offers flexible financing solutions with an easy application-only process for vehicles up to $150,000 and no down payment required. Unique among lenders, US Bank does not file a blanket lien against the borrower’s business, only on the financed assets.

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Borrowers are able to structure payments according to their cashflow are able to pay on a monthly, quarterly, or annual basis and payment terms can range 24-60+ months.

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While US Bank offers SBA loans, the terms will differ from their traditional financing program listed above.

Wells Fargo
_Bank

Visit Site

Pros & Cons

No down payment options
Only works with established businesses
SBA Loans

Overview

Wells Fargo can be a great option for established businesses but they have stricter requirements than most of the direct lenders on our list. They don’t work with new companies, requiring businesses to have been in business for at least 12 months and to have at least $100,000 in annual revenue and a credit score of 600+.

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The company will finance semi-trucks as well as specialty vehicles like tow trucks and offers terms of up to 84 months. Borrowers with strong credit scores can also finance 100% of the vehicle with no down payment options available.

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While Wells Fargo offers SBA loans, the terms will differ from their traditional financing program listed above.

Volvo
_{In-House Financing}

Visit Site

Pros & Cons

Terms up to 72 months
No down payment options

Overview

Volvo offers in-house financing on new vehicles and certified used vehicles. Terms last up to 72 months and 100% financing options are available. The company offers financing flexible terms as well as leasing and rental solutions.

Ryder
_{In-House Financing}

Visit Site

Pros & Cons

No money down options
Discounts for veterans and industry association members

Overview

While primarily a transportation company, Ryder also has a used truck marketplace where companies can find the used vehicle of their choice and finance it with Ryder.

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The company offers a number of promotions including no money down and minimal payments for the first 3 months. Ryder also offers discounts to veterans, American Trucking Association members, and Women in Trucking Association members.

What is the best way to finance a truck?

If you have good credit and long-term experience in the industry, a loan from a bank or credit union is usually the best option as they typically offer lower interest rates and longer repayment terms than other lenders.

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Alternative lenders and in-house financing can be great options for borrowers with bad credit or no credit.

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What credit score is required to finance a semi-truck?

Traditional lenders like banks and credit unions typically require a credit score of 600 or more. Those with a lower credit score (or no credit at all) will typically need to work with an alternative lender or in-house financing team.

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How many years can you finance a semi-truck?

Commercial truck loans typically last 12- 84 months but some lenders offer terms of up to 10 years or more.

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Can you refinance a commercial truck loan?

Yes, it’s possible to refinance a commercial truck loan.

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What is the average monthly payment for a semi-truck?

While monthly payments can vary widely depending on the value of the truck, the down payment, and the interest rate, example payments can still be helpful. Assuming a borrower financed a $100k vehicle at a 6% interest rate while putting 20% down, their monthly payment would be approximately $1,168.

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How much is a new semi-truck?

A new semi-truck typically costs $100,000-$200,000 depending on the make, model, and dealership.

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How much is a used semi-truck?

The average price for a used semi-truck was $86,732 as of August 2022.

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Do you need a CDL to buy a semi-truck?

Technically, you don’t need a commercial driving license (CDL) to purchase a semi-truck but in order to drive the vehicle you’ll need a CDL.

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If you are applying for a commercial truck loan without a CDL, you may be classed as a high-risk borrower. The lender may require that you demonstrate how the purchase will be a worthwhile investment for your company. For example, if you are in a trucking partnership, your partner could have a CDL.

Trending Guides

Best Semi-Truck Financing Companies in 2024

What is commercial truck financing?

Financing vs Leasing

Financing

Key Features

Pros

Cons

Operating Lease

Key Features

Pros

Cons

Other types of leases

Capital Leases or Finance Leases

Lease-to-Purchase

How does commercial truck financing work?

Down payments

Interest rates

Fees

Payment terms

Tax Implications

Conventional vs SBA Loans

Advantages of SBA loans

Disadvantages of SBA loans

Commercial Truck Financing Rates

Truck Financing Calculator

Truck Financing Requirements & What Lenders Look For

Credit Score

Bad Credit

No Credit

Hard vs Soft Credit Pull

Down Payment or No Money Down

Experience

Business Finances

Collateral

Truck Requirements

Truck vendor

Commercial Truck Insurance

Comparing Lenders & How to Get Commercial Truck Financing

Types of Lenders

Banks & Credit Unions

Alternative Lenders (Direct Lenders, Online Lenders, etc)

In-house Financing

First-Time Semi-Truck Buyer Programs

Financing Process

Applying for commercial truck financing

Best Commercial Truck Financing Companies

Commercial Fleet Financing (CFF)Direct Lender

Pros & Cons

Overview

Smarter Equipment FinancingDirect Lender

Pros & Cons

Overview

CAG Truck Capital‍Direct Lender

Pros & Cons

Overview

US BankBank

Pros & Cons

Overview

Wells FargoBank

Pros & Cons

Overview

Truck Lenders USA‍‍Direct Lender

Pros & Cons

Overview

Freedom Truck Finance‍Direct Lender

Pros & Cons

Overview

VolvoIn-House Financing

Pros & Cons

Overview

RyderIn-House Financing

Pros & Cons

Overview

What is the best way to finance a truck?

What credit score is required to finance a semi-truck?

How many years can you finance a semi-truck?

Can you refinance a commercial truck loan?

What is the average monthly payment for a semi-truck?

How much is a new semi-truck?

How much is a used semi-truck?

Commercial Fleet Financing (CFF)
_{Direct Lender}

Smarter Equipment Financing
_{Direct Lender}

CAG Truck Capital
‍_{Direct Lender}

US Bank
_Bank

Wells Fargo
_Bank

Truck Lenders USA
‍‍_{Direct Lender}

Freedom Truck Finance
‍_{Direct Lender}

Volvo
_{In-House Financing}

Ryder
_{In-House Financing}