The Alternatives in Obtaining Dump Truck Financing

by : Kris Koonar

Getting finance for a dump truck is similar to getting finance for anything else. You have to undergo the same steps to find the right program to suit your needs. Whichever type of truck, dump truck, semi truck or heavy-duty truck you want to buy- there is a loan program for each. There are many other options available for financing.

The first place one would normally checkout is the local bank. Mostly the criteria would be to have a good credit score at the personal level and other documentation required. The previous year' s income tax returns may be needed along with the current financial statements. If it is a new business just starting off, it also should have a credit score of 680 or higher. Such businesses are considered high-risk areas and the companies should be able to meet the higher lending standards. Most of these banks as well as the financial organizations offer loan programs for the purchase of or lease of dump trucks.

When the company that requires finance for the purchase of dump truck takes up a loan program, the ownership title is transferred at the end of the loan repayment period. However, the documentation required initially to acquire a loan is a lot and hence, many companies drop the idea. When opting for the loan option, the organization has to be careful and enquire whether the loans extended are only for new trucks or also converted trucks. Most often there is lot of paperwork involved in this. However, now such companies are trying to design a system which would involve only using the applications to provide loans. The dump truck would be the collateral in this case for the loan. In most cases the credit score required is 575.

One alternative is opting for the partial finance, where part of the amount is given as loan and you put down part of the amount and finance it accordingly. These loans are easier to avail of and you may get better rates and terms of payments.

Another option that these companies have is the dealer's financing and inventory program. The lending company displays an inventory he has and the financing agreements. This kind of financing is useful for the large as well as the new start up companies. This provides an excellent opportunity to the companies to access great deals to the buy the appropriate dump trucks, as per their specific requirements.

One can also opt for the equipment leasing option. It is a contract for a longer period with a take-over option. The dump truck is owned by the leasing company till the period of rent, while the company uses the dump truck. The truck is the security itself. In leasing, the first and last payments are usually about 20% of the truck cost amount as down payment. This is preferred than the loan method as the initial expenditure is lower. Generally, credit history of larger periods like 2 to 3 years is not required as is the case with the loan method. The advantage of leasing is also the tax benefit.

When you are on the lookout for financing your dump truck purchase you need to consider things like the initial payment, the monthly payments, collateral required and any buyout clauses. You may even consult a broker regarding the benefits of dump truck financing. Each type will have its own pros and cons and you need to consider all these factors before selecting the correct one.