FREIGHTTRAIN
Seasoned Expediter
how much cash would i need down to finance 100,000 dollar truck and is it hard to get financed with only a 600 credit score
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finance101
- Thread starter FREIGHTTRAIN
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guido4475
Not a Member
Back in 1995 a salesman freind of mine once told me that if anyone had 50% down, they could get financed by any major lender.But I don't think that is so true today.Even guys with excellent credit are having a tough time getting loans.But please, don't do a lease purchase plan, no matter how desperate you become.I have not seen or heard of a successful one yet.Build your credit up is the best advice I can give you, and take your time.Something better may come your way in the meantime.
Tennesseahawk
Veteran Expediter
With a 600 score, you would need 100,000 down. No one is touching the 600 crowd today... even high 6's.
I know what you are talking about, i to have excellent credit and business plan and own another business as well but when i tried to get finaced thru sba no luck they tell me because of all failed loans in this market they are not willing to take the risk. Example i was working with jeff at stoops truck was 148,000 and puting 45,000 down still no chance good luck
moose
Veteran Expediter
i Did , actually many times , problem is they far in between .
here are a few of the simple steps to take ,when one looks on a lease purchase contract :
*is it a 'walk away lease'?
*what are the 'walk away' terms ?
*can you pay the outstanding balance ahead of time?, any penalty's ?
*can you lease on the truck to your carrier of choice ?
*service & maintenance plans & charges ?
*hoe is responsible for plating , licensing, registration,insurance ,Ext. ?
*tax benefits ?
*total money paid till you own the truck.
*terms in which you will own the truck.
*fax it over to OOIDA, fax it over to your tax man , & a lawyer .
i personally know of a few truckers teams , that cannot get a store credit at the mattress factory , but leased , and now own a nice KW's ,
greg334
Veteran Expediter
You know guys credit without previous truck experience is hard to get.
Even if you have driven for someone else, it seems many can't get the financing.
The solution is to buy cheap and used and make a point that this is a step up.
I can not in any way see financing $145k for a truck in this economy without a guarantee of work which is not going to happen with any carrier except your own.
Even if you have driven for someone else, it seems many can't get the financing.
The solution is to buy cheap and used and make a point that this is a step up.
I can not in any way see financing $145k for a truck in this economy without a guarantee of work which is not going to happen with any carrier except your own.
guido4475
Not a Member
Why would you want to spend that amount of money on a truck when there are plenty of 08 and 07's with plenty of warranty left on them for $45,000 or even less?Do what Greg said,and what I feel also, buy decent cheap and let the truck work for you,not you working for the truck.
Brisco
Expert Expediter
Glad to see I am not alone..........
Go read the other thread started by Laurdess in the "Newbies" area. (Trying To Buy A Truck) I've been in the same boat since January.
I have a huge comment to the OP of this thread.
Trying to get a $100,000 loan with a 600 Credit Score is what put us here in this economic crisis we are in. Toooo many people with "600" beacon scores making $40K a year were being given loans to buy $250,000 houses.
EARN your $100,000 truck!! With a 600 score, buy a $12,000 truck. Work your score up to 700, then buy a $50,000 truck. Work your score up to 800+, THEN GO LOOK AT THAT $100,000 TRUCK!!
With as ticked off as I am about these new banking regulations that are in play because of Barney Franks, Chris Dodd, Fannie Mae and Freddie Mac throwing loans out to people like you, I'd put you in a $600 Pinto delivering envelopes as a courier throughout Chicago with your 600 credit score.
Go read the other thread started by Laurdess in the "Newbies" area. (Trying To Buy A Truck) I've been in the same boat since January.
I have a huge comment to the OP of this thread.
Trying to get a $100,000 loan with a 600 Credit Score is what put us here in this economic crisis we are in. Toooo many people with "600" beacon scores making $40K a year were being given loans to buy $250,000 houses.
EARN your $100,000 truck!! With a 600 score, buy a $12,000 truck. Work your score up to 700, then buy a $50,000 truck. Work your score up to 800+, THEN GO LOOK AT THAT $100,000 TRUCK!!
With as ticked off as I am about these new banking regulations that are in play because of Barney Franks, Chris Dodd, Fannie Mae and Freddie Mac throwing loans out to people like you, I'd put you in a $600 Pinto delivering envelopes as a courier throughout Chicago with your 600 credit score.
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Yes i agree in this market why spend 145000 for a truck with so many others out there. But for account i have now it requires me with certain equipment for the team not so much for customer we are running from either jamacia,ny or logan airport to california every 7 days. And 9 months ago finally got the truck needed PAID PRETTY CLOSE TO THAT FIGURE
chefdennis
Veteran Expediter
guido4475 wrote:
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If you are talking about leasing from the carrier you are leased to to haul freight, then id agree to a point. But if you are talking leasing from a "commerical lender" , then i disagree....yes people that aren't aware of what the conditions of the lease are and don't fully understand will have problems....but if you know whats written in the lease, how it is structured and what the conditions are, you can do just fine...
My son inlaw just leased a new 2010 truck for this business, he will own it in 4 yrs for 1 dollar after the term. He leased his previous 2 trucks for his home Fed Ex delivery routes and just sold both of them within the last 6 months and made a profit...
My truck is owned my my leasing company, and it will be sold to me at the end of term for 1 dollar and i will do whatever i want with it at that time....
Moose put a good list of questiones up and Brisco also made a great amount of sense in his post on "Rebuilding" your credit score.......
And if you look hard enough, and not just in the "conventional places", there is money available for the purchase of truck...do any of you know the the US Ag dept lends money.....GE is one of the largest lessing companies in the world for commerical vehicles (i have a friend that as 15-20 ice cream trucks with them at any given time).....Dana Corp owns a Leasing company....look around, there is money available, you just have to be willing to do the leg work.....
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If you are talking about leasing from the carrier you are leased to to haul freight, then id agree to a point. But if you are talking leasing from a "commerical lender" , then i disagree....yes people that aren't aware of what the conditions of the lease are and don't fully understand will have problems....but if you know whats written in the lease, how it is structured and what the conditions are, you can do just fine...
My son inlaw just leased a new 2010 truck for this business, he will own it in 4 yrs for 1 dollar after the term. He leased his previous 2 trucks for his home Fed Ex delivery routes and just sold both of them within the last 6 months and made a profit...
My truck is owned my my leasing company, and it will be sold to me at the end of term for 1 dollar and i will do whatever i want with it at that time....
Moose put a good list of questiones up and Brisco also made a great amount of sense in his post on "Rebuilding" your credit score.......
And if you look hard enough, and not just in the "conventional places", there is money available for the purchase of truck...do any of you know the the US Ag dept lends money.....GE is one of the largest lessing companies in the world for commerical vehicles (i have a friend that as 15-20 ice cream trucks with them at any given time).....Dana Corp owns a Leasing company....look around, there is money available, you just have to be willing to do the leg work.....
greg334
Veteran Expediter
So I don't see the reasoning behind the cost of the equipment at this point, establishment of the business means a lot more now than it did 18 months ago.
if it was a specialized truck that has to have specialized equipment (meaning not an "expediter style truck) that only a few are being used in the market today and none are on the used market, then that is one thing to actually mean something.
But I gather comfort and "apartment style" on the road living is what you are going for which doesn't seem to fit the needs of the business nor offer the opportunity to allow more latitude for the business to hedge problems.
So the one thing that I would consider as a very important point to securing finance is this; You mentioned the NY to California stuff, are you already covering it with exisiting trucks?
Or do you have a solid exclusive contract and commitment with that customer who will guarantee the work and with that is the customer not in trouble, meaning paying their bills?
Yes it is exclusive contract no i have not ran this before it was being done in a different way before me and client expressed another way to best suit them and myself. The truck is not one of a kind but what they and i wanted it would make it difficult to find if possible. So thats why i had it built. The truck will be free and clear at contracts end.
Slo-Ride
Veteran Expediter
I agree with a few of the guys,,you can find a good lease purchase out here. Properly not thru who your leasing on to tho,,,thats the fastest way to lose a piece of equipt..Find a group private investors that don't want your equipt back when times get slow and tought..Most of these investors will deal in yellow iron and heavy equipt only..They want your payment for sure but will usually work with you when tough times hit ya..You work with them and give em a heads up before ya fall behind on the payment day and its usually no problem,,as long as ya can state when your going to catch up..If ya lie to em for sure you'll lose your equip..
I said somewhere in this form that the walk away option isn't good..The way I look at that is it makes it to easy to throw your hand up and quit instead of working threw it to make you and your truck successful (or at least get the feel you are
)My lease purchase has worked out great for me,,I put down more then needed to. Up front money will be needed for sure.
And for sure no matter what,,Something always comes along better after the purchase.I know i could have done better on this truck if I took more time and shopped better..
As I have said before, "Cash is king" in this business. As suggested by others, don't borrow money for this business unless you have a fair amount of capital behind you. The number one failure in this business is due to undercapitalization.
Start small and work your way up.
Most of the new trucks are junk anyways because of all the EPA stuff on them. I have yet to find anyone with one of these and it is operating trouble free. Hopefully that works itself out over time.
With the economy stuggling and tight credit, a business plan is worthless because the bank knows there are too many variables right now within the industry for it to have any value.
Most are looking for a history of finance buying trucks and years of experience. I do agree in that there is money out there but you have to do some looking to find it and making sure you aren't "selling the farm" to get it. Case in point, a guy I talked to a week ago is carrying a truck load with 28 percent interest That is a profit killer.
Start small and work your way up.
Most of the new trucks are junk anyways because of all the EPA stuff on them. I have yet to find anyone with one of these and it is operating trouble free. Hopefully that works itself out over time.
With the economy stuggling and tight credit, a business plan is worthless because the bank knows there are too many variables right now within the industry for it to have any value.
Most are looking for a history of finance buying trucks and years of experience. I do agree in that there is money out there but you have to do some looking to find it and making sure you aren't "selling the farm" to get it. Case in point, a guy I talked to a week ago is carrying a truck load with 28 percent interest
That is a profit killer.
greg334
Veteran Expediter
Ok, it makes more sense but the problem may be that even with a contract in hand, there may be a risk to the bank, seeing that the truck will be paid off at the contracts end leaving the question of tight financing. In addition, the need for a specially equipped truck may also mean that if the bank has to take possession, the loss they take may be greater compared to the loss they take with a normal truck.
I should have ask this before, did you work with this customer before under a contract?
Have you had the contract reviewed by a lawyer and his summary included for the bank info?
AND finally, what special equipment is needed for this customer that can't be filled by buying a used truck?
nightcreacher
Veteran Expediter
In 1995 i bought a new KW truck was $100000,and I put 30k down.my payment was 1866 for 5 years.When the truck was 3 years old i traded it for 1999 freightliner,that was $115000.Only down payment was the 1995 KW.My payment was 1975,for 5 years.In 2004 i traded the 1999 Freightliner for the truck I have now,A 2004 Freightliner,and this truck is paid for ,but i paid $1978 for 5 years.In 1995 my credit was a low 600's
In today's world,you cant afford to buy a truck with a + 2000 payment,and that's what your asking for.
Granted,the depreciation and interest over five years,will be more than your actually borrowing,but freight rates are to unsteady,and you never know when that good contract,gets underbid
First question, yes i have worked with this contact for 7 years and under contract. Yes legal system is in place for all parties. I have been running account for 7 years but not at what was needed for this particular venture. After my other trucks were paid off simply sold them to other people. I ran fed ex wg 2 years and you know you cant or shouldnt discuss these accounts. I was just trying to comment on finance of equipment this unit is not that special but has some unique features required by account.