Commercial Truck Financing and Equipment Loans in America
As of January 2022, the number of truck drivers in the United States was estimated to be around 3.5 to 3.6 million. However, this number may have fluctuated due to various factors such as changes in industry demand, economic conditions, and shifts in workforce demographics. For the most accurate and up-to-date information on the number of truckers in the US in 2022, I recommend consulting recent reports from organizations such as the American Trucking Associations (ATA) or the Bureau of Labor Statistics (BLS). They often provide comprehensive data and analysis on employment trends in the transportation sector.
The trucking industry employs millions of people around the country, from warehouse workers to delivery truck drivers, and generates hundreds of billions of dollars annually. Trucks in all forms are the lifeline between producers and consumers; basically, there is no supply chain without the trucking industry. Transportation may come in many forms, but ultimately end-point in the supply chain is the delivery truck. Delivering goods remains dynamic, and what remains constant is the ever-increasing demand from consumers keeps trucking a vital industry.
Trucks do not last forever! Industry and regulations allow the engine renovation to flourish, forcing new technology to make the trucking industry not just mile efficient but also environmentally friendly. Typical diesel trucks emit carbon compared to the hydrogen or electric semi-trucks. These types of trucks are what the industry disruptors are focusing on when building the next fleet of heavy equipment like semi-trucks. Electric semi-trucks or hydrogen-powered semis give trucks more than the typical current mileage semi-trucks can operate without becoming a burden to operate—basically, 500,000 miles of life.
Lenders see semi-trucks over 500k in mileage to be worth less than those trucks that have less mileage. The average miles each truck travels per year are over 45,000 miles, and the average lifetime of a long-haul truck is 15-16 years. Cost prohibitive repair costs will make it easier to finance new trucks than giving loans to pay for repairs soon-to-be obsolete trucks with devalued asset value.
With regular maintenance and upkeep, most commercial trucks, small box trucks, and business short-haul trucks today can last for more than 100,000 miles. Their costs vary from $30,000 to $61,000 depending on if you need a refrigerator truck (cold) or just a delivery truck. Semi-trucks can vary from $80,000 to $150,000 or more. Trucks are a good portion of a business’s expenses and can use up cash-on-hand quickly.
Small Business Types of Financing for the Transportation and Trucking
To maintain cash flow, take advantage of write-offs and depreciation; most long and short-haul trucking companies either lease or finance their trucks. Equipment Finance Agreement is the recent form of equipment loan small business can obtain. The difference between equipment lease and equipment loan is that there is no balloon payment at the end of the term. Ownership start out right. Leasing with buyouts are still available but the popularity of the equipment loan has made it not only easy but convenient for lenders as they don’t have to deal with sales tax implications on some types of equipment leases including titling and DMV fees and taxes. They’re basically a loan is made to a trucking company with a lien to the vehicle with very little usage restriction. There are many different financing options for trucking companies, and a few of these options include:
Terms on alternative financing utilized for the transportation industry will be only 12 months to 24 months. Funding amounts can be as high as $5,000,000, and collateral is not always required for a traditional working capital loan, line of credit or term loans. If you go with a traditional bank, you will likely be required to put up additional collateral with bigger down payment than typical alternative lenders.
Alternative Merchant Cash Advance for Trucking Companies
When deciding to finance, you can start with our online application.