How Long For Semi-Truck Financing

Images by Getty Images; Illustration by Issiah Davis/Bankrate

If you are growing your business, finding the funding to purchase a semi truck can be difficult. With the cost of a new semi truck often ranging from $70,000 to $200,000, you may need a semi-truck loan to help you cover the cost.

However, the timeline for getting a truck loan can affect how long it takes for you to be able to utilize the truck. How long it takes to get semi-truck financing depends largely on the lender, the type of loan and your application. For instance, online lenders can fund semi-truck loans within 24 hours, while bank lenders may take up to a month.

Learn how long you can expect to wait for semi-truck financing based on these factors.

How long does it take to get semi-truck financing?

The time it takes to receive semi-truck financing varies by lender and loan type. The best semi-truck financing offers fast funding timelines, low interest rates and long terms. Consider how long each lender takes to approve semi-truck loans before you apply.

Banks and credit unions

• Term loans: A few days to a month
• Equipment line of credit: Quicker than a term loan, but timelines vary by lender

Banks and credit unions will likely have longer timelines for funding than online lenders or direct lenders. Most banks will fund semi-truck loans within a week, but may take up to a month to approve the financing. For example, PNC Bank promises funding within one to five days for certain loans.

SBA lenders

SBA loans: 30 to 90 days

SBA loans have the longest funding timeline. The application and funding process for SBA loans are notoriously long because lenders must receive SBA approval before granting you the loan. Despite the long process, SBA loans offer low interest rates and long repayment terms, desirable features for small businesses. If an SBA loan makes the most sense for your business, and you can wait for funds, it’s a great option. Otherwise, look to other lenders for a faster funding timeline.

Online lenders

Term loans: 24 to 48 hours

If you need funds quickly, consider online lenders. Online lenders tend to use technology and automated processes to underwrite loans, making the application process more efficient. While timelines vary, the fastest lenders offer funding within 24 hours to 48 hours. Examples of online lenders with fast funding timelines:

Direct lenders

Term loan: Anywhere from a few hours to 48 hours

Direct lenders are lenders that approve and fund loans within their own organization, rather than funding through third parties. Because the entire process is handled in house, they tend to have a quick application process, funding in hours or days. They may also offer more specialized options for semi-truck funding. Commercial Fleet, a direct lender for semi-truck loans, provides funding within 24 hours.

Types of semi-truck financing

There’s more than one way to get a loan for a semi truck. Look into each type of semi-truck loan to help you decide where to start your search for the loan you need. Consider each loan’s interest rates, loan terms and eligibility factors to help you choose the right loan.

How to get semi-truck financing

As with any financing option, semi-truck financing has pros and cons. Once you decide you are ready for a semi-truck loan, take these steps to get a semi-truck loan.

1. Check your credit score: Because lenders will perform an inquiry about your credit, you’ll want to check your credit score to know which loans you qualify for.
2. Save cash for a down payment on the loan: While some lenders offer 100 percent financing, most will require you to put down 10 percent to 20 percent of the purchase price.
3. Figure out how much you can afford to spend on the truck: Use a business loan calculator to estimate your loan repayments. That way you know if the repayments will fit within your budget.
4. Make sure you fit the lender’s requirements: Many lenders will post their requirements for your time in business, minimum credit score and minimum revenue required to be eligible.
5. Compare your loan options: Consider the different types of loans that you could get to purchase your semi truck, such as an equipment loan or an SBA loan. Choose the loan with the features that best fits your needs.
6. Shop around with lenders: Compare multiple lenders to see which one offers the best interest rates, repayment terms and other loan features.
7. Get preapproval for the loan, if possible: Many lenders will offer prequalification, showing you what you qualify for without performing a hard credit check. This way you know whether you could be approved with this lender and how much you’re approved for.
8. Find a vehicle: Now you can do your due diligence in researching the right semi truck for your purchase.
9. Fill out and submit your application: Finally, gather all your business financial statements, licenses and formation documents. Then, send in your application for the loan. The lender will reach out to you to tell you whether you’re approved or not.

The bottom line

Timelines for semi-truck financing can vary greatly, ranging from a few days to several months. Lender and loan types impact how quickly you can get your funds. Lenders like banks and credit unions may take a week or up to a month to approve and disburse funding. But you can go with an online lender for faster funding within 24 to 48 hours.

Focus on the things you can control to help keep the application and funding process shorter for your semi-truck loan. Make sure you meet all of the eligibility requirements before applying for a specific loan. Also, gather all the documents needed before you sit down to fill out the application.

Frequently asked questions about semi-truck financing

• What credit score do you need to buy a semi truck?
  

  Credit score requirements vary by lender. Banks often require a minimum personal credit score of 670 or higher, while many online lenders lower the requirement to 600. Bad credit loans are also available, often with credit score minimums as low as 550.

   

• How long does it take to pay off a new semi truck?
  

  The time it takes to pay off a new semi truck depends on the repayment term you choose when you receive the loan. Many semi-truck loans offer financing up to five years, some longer. You can pay off the semi-truck loan faster by applying a higher payment toward the principal loan amount than is required.

   

• What is a good interest rate for semi-truck financing?
  

  Semi-truck loan rates vary widely, ranging from as low as 6 percent to as high as 35 percent, depending on creditworthiness and lender. A good interest rate typically falls within the 6 percent to 10 percent range. Low interest rates are reserved for the most creditworthy borrowers who have strong credit and business finances.