Best Business Loans For Owner Operators, Trucking Companies, & Transportation Businesses
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Expert Analyst & Reviewer
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You’re the owner of a trucking company, and it’s time for expansion through the purchase of new equipment, hiring of new employees, or improvements to your facilities. But will those improvements break the bank? Or maybe, an unexpected emergency has cropped up, and you feel trapped.
You’ve crunched the numbers, and it looks like you’re facing a major financial hurdle. How do you handle this financial crisis?
A business loan is a great way to expand your trucking business or get you out of a financial bind. The key is to know what type of loan best fits your needs, is the most affordable, and provides the greatest return on investment.
Whether you own a large trucking business with multiple drivers or you’re an owner-operator with one vehicle, read on to learn more about the loan options available for your business.
Learn More About Our Top Picks
| Company | Best For | Next StepsBest For |
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OnDeck  | Best for trucking business loans | Best for trucking business loans
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Lendio  | Best for trucking startups | Best for trucking startups
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SmartBiz  | Best for SBA trucking loans | Best for SBA trucking loans
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Fundbox  | Best for bad credit | Best for bad credit
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BlueVine  | Best for owner operators | Best for owner operators
|
Read more below to learn why we chose these options.
Table of Contents
Types Of Business Loans For Truckers
If you’re in the trucking industry, there are several business loan options available for you. For the purchase of a truck, you should consider equipment financing. You may also be able to qualify for the SBA Microloans program, which provides up to $50,000 in financing for expenses.
Short-term loans, lines of credit, and business credit cards are also available to you, but these typically come at a higher cost.
Let’s look at the different types of funding available for truckers to find the best fit for you.
Small Business Administration (SBA) Loans
The Small Business Administration offers several programs that provide funding for trucking companies. SBA loans are backed by the government, opening up new financing opportunities for small businesses that don’t qualify for conventional business loans. SBA loan funds are flexible and can be used for a number of purposes, including the purchase of equipment, business expansion, or for use as working capital for operating expenses.
SBA loans to consider include:
- SBA 7(a) Loans: The SBA 7(a) loan program is one of the SBA’s most popular offerings. With a 7(a) loan, borrowers can receive up to $5 million to be used for almost any business purpose, including the purchase of equipment or machinery, real estate or land purchases, or even acquiring another business.
- SBA Microloans: If you run a smaller trucking operation or you’re an owner-operator and you have an expense that requires $50,000 or less, the SBA microloans program may be an option for you. The average loan distributed through this program is $13,000. Funds can be used toward the purchase of machinery or equipment, working capital, or supplies.
- Veterans Advantage Loans: These loans are for servicemembers and veterans. These loans offer the same rates and terms as 7(a) loans but have reduced guarantee fees.
Equipment Financing
Equipment financing is exactly what it sounds like: funding that is used to purchase equipment. In the trucking industry, this could mean the purchase of a new or used truck, a trailer, or other long-term physical assets that are necessary for operations. This type of funding allows you to break down the cost of expensive equipment into smaller payments that are easier to manage.
There are two types of equipment financing:
- Equipment Loans: With a loan, you’ll make scheduled payments that go toward the principal balance and interest. Once all payments have been made, the equipment is yours. If you plan to keep your equipment for many years, this is the best option for you.
- Equipment Leases: When you lease equipment, you’re essentially renting from the lender. You make payments each month to be able to use the equipment. Once your lease is over, you’ll return the equipment and can upgrade to the latest model. In some cases, you may be able to pay the remaining balance if you’d like to own the equipment outright. With leases, monthly payments may be more affordable and it’s possible to find leases that don’t require a down payment. However, the total cost of the lease typically winds up being more expensive than loans due to higher interest rates.
Medium-Term Installment Loans
A medium-term installment loan is a loan that is paid off over a period of 1 to 5 years. With this type of loan, you can break down the cost of a purchase or receive working capital while repaying with low monthly payments.
Medium-term installment loans can be used for any business purpose. These loans can be used for the purchase of new equipment. You can use the funds for working capital. Loan proceeds can be used for business expansion or acquisitions. You can even use these loans to refinance existing debt.
Business Lines Of Credit
A business line of credit is similar to a credit card. A borrower has a credit limit set by the lender and can make multiple draws as needed up to and including the credit limit. With a business line of credit, you only pay interest and fees on the borrowed amount. For example, if you have a total credit line of $200,000 but have only spent $50,000, you’ll only pay interest or fees on the $50,000.
A line of credit can be used for any business expense, from unexpected emergencies to covering operational expenses or purchasing equipment.
Short-Term Business Loans
Short-term business loans are loans that are paid back over a very short period of time. This period of time varies, but it will not exceed one year.
Short-term loans are one of the most expensive forms of credit, so it is best to only use these loans when absolutely necessary. Because funding is fast (potentially as short as 24 hours), a short-term loan is best for emergency situations when time is of the essence.
Borrowers that have not been in business long or have low personal or business credit scores may have no other options than to seek a short-term loan. If this is the case, the return on investment should be calculated to determine if the loan is worth the high cost.
Business Credit Cards
When used responsibly, a business credit card can be an enormous asset to a trucking business. A business credit card offers a revolving line of credit that can be used any time it’s needed. This is especially helpful when an emergency arises.
With responsible use that includes paying off (or paying down) your card each month, you’ll even be able to boost your credit score while having access to extra capital when you need it. In addition, many credit cards offer rewards programs that allow you to earn points or cash back after every qualifying purchase.
Invoice Factoring
If you have unpaid invoices affecting your cashflow, consider invoice factoring. Invoice factoring isn’t technically a loan. Instead, you sell your unpaid invoices to a lender. The lender purchases your invoice for a discount. This discount goes to the lender for providing a fee, while the remainder of the balance goes into your pocket.
This is a great option for businesses that have multiple unpaid invoices and don’t want to seek other types of financing. Invoice factoring also has lower credit score, annual revenue, and time in business requirements, making it easy to qualify provided you have eligible invoices.
Best Loans For Trucking Companies
Unsure of where to start to get a loan for your trucking company? Whether you need to purchase new equipment, have credit challenges, or need a flexible line of credit to improve cashflow, start your search with these lenders that offer funding to trucking businesses.
1. OnDeck: Best For Trucking Business Loans
OnDeck
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If you want to purchase a truck but want to bypass the hassles of receiving a bank loan, you may find fast funding through OnDeck. OnDeck offers two loan products that may work for your trucking business: lines of credit and term loans.
Lines of credit up to $100,000 are available to qualified borrowers. These come with 12-month repayment terms. You may also apply for a term loan of up to $250,000 to purchase your truck, other equipment, or for other large purchases for your trucking company. Repayment terms of up to 18 months are available for OnDeck’s term loans.
Though repayment terms are shorter and costs may be higher for an OnDeck loan, funding is relatively fast and easy. OnDeck also has much lower borrower qualifications than banks, such as a minimum credit score of 600 and a minimum time in business of just one year.
Pros
- Fast & easy application process
- Funds are disbursed quickly
- Low credit score requirements
Cons
- Rates can be expensive
- Short repayment terms
2. Lendio: Best For Trucking Startups
Lendio
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Lendio is a great choice for trucking startups. Unlike other lenders on this list, Lendio isn’t a direct lender. Instead, this loan aggregator works with multiple lending partners to provide you with different funding offers, even if you’re a new business.
Through Lendio, you can apply for many different types of financing, from short-term loans to lines of credit, SBA loans, and startup loans. Lendio will use your information to match you with lenders, helping you compare your options and get the best rates and lowest terms for your situation.
Lendio offers startup loans up to $750,000 with terms up to 25 years.
Pros
- Multiple types of financing available
- Fast & easy application process
- Funding available for startups
Cons
- Rates can be expensive
- Startup funding can take 2 to 4 weeks to disburse
3. SmartBiz: Best For SBA Trucking Loans
SmartBiz
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SmartBiz takes the guesswork out of securing an SBA loan. SmartBiz streamlines the SBA application process, allowing you to prequalify in just minutes. After submitting an application, SmartBiz connects you with bank and non-bank lenders to help you secure the funding you need for your business.
Through SmartBiz, you can receive up to $5 million in funding for your trucking business with low rates and long repayment terms. You may also be able to receive funding in as little as seven days, although the process may be a bit longer for some borrowers. Funds can be used for a variety of purposes, including the purchase of a truck or other equipment, hiring new employees, or expanding your business.
If an SBA loan isn’t right for you, SmartBiz can also help connect you with a lender to receive a bank term loan of up to $500,000.
Pros
- Low rates & long repayment terms
- High borrowing limits
Cons
- Long application process
- Funds can take a while to disburse
4. Fundbox: Best For Bad Credit
Fundbox
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If you have bad credit, Fundbox may be able to offer you the funding you need for your trucking business. Through Fundbox, you can receive a revolving line of credit up to $150,000, even if you have credit challenges. You can use your line of credit for almost anything, from making a big equipment purchase to handling an emergency expense.
To qualify for a line of credit, you must have a credit score of at least 500. Annual revenue of $100,000 and a time in business of at least six months is required. You must also share your business transactions through your business bank account of accounting software.
Once approved, you can access your line of credit instantly. Once a draw is initiated on your line of credit, you’ll receive funds in your business bank account as quickly as the next business day. Your outstanding balance is repaid over a term of 12 or 24 weeks.
Pros
- Low credit score requirements
- Funds are disbursed quickly
- Fast & easy application process
Cons
- Rates can be expensive
- Short repayment terms
5. BlueVine: Best For Owner Operators
BlueVine
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BlueVine offers two financing options that may be a good fit for trucking owner-operators. A line of credit up to $250,000 is available and can be used for almost anything. This includes emergency expenses, equipment purchases, or just for use as working capital to help with operational costs.
If you have unpaid invoices, BlueVine offers another option through its invoice factoring service. You can receive up to $5 million for your unpaid invoices to maintain the cashflow of your business. Invoice factoring also has low borrower requirements. As long as you have unpaid invoices, you may qualify, even if you have a low credit score or have only been in business for a short time.
Pros
- Financing is available for startups
- Low credit score requirements
Cons
- Rates can be expensive
- Short repayment terms
Fuel Cards For Trucking Companies
One big expense that’s hard to ignore is the cost of fuel and maintenance for your trucks. Whether you own a single truck or an entire fleet, one financing option to keep in mind is a fuel card.
Fuel cards can be used to gas up your rigs, while some can also be used to pay for maintenance and repairs at select locations. Having fuel cards for your drivers can also help you track and manage expenses while they’re out on the road. Additionally, you may even receive savings at the pump, cash back, or rewards just for using your cards.
Don’t have a fuel card for your trucking business? Check out the 6 Best Fuel Cards For Truckers & Trucking Companies and start saving today.
Trucking Business Loan FAQs
Final Thoughts
No matter what your financial needs, there’s a loan available to help you start or expand your trucking business. The key is to understand your options, shop around, and determine if the return on investment exceeds the cost of the loan. Even if your funding needs are urgent, it’s critical to borrow responsibly to put your trucking business on the road to success.
In Summary: Best Loans For Trucking Companies
- OnDeck: Best for trucking business loans
- Lendio: Best for trucking startups
- SmartBiz: Best for SBA trucking loans
- Fundbox: Best for bad credit
- BlueVine: Best for owner operators
Erica Seppala
Expert Analyst & Reviewer at Merchant Maverick
An expert in accounting, finance, and point of sale, Erica has been researching and writing about all things small-business since 2018. Erica's insights into personal and business finance have been cited in numerous publications, including MSN, Real Simple, and Reader's Digest. She is a graduate of Limestone College.
View Erica Seppala's professional experience on LinkedIn.
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Do you know any banks or credit card companies that accept truckers that do not want to use there personal credit as a guarantor. They have good business credit and will like to keep it seperate from personal.
This comment refers to an earlier version of this post and may be outdated.
Hi Hictor,
Short-Term Business Loans, Medium-Term Installment Loans, and Small Business Administration (SBA) Loans all typically require a personal guarantee–so you can cross them off your list. The other loan options mentioned within this post may be the type of alternatives you are looking for. Good luck!
This comment refers to an earlier version of this post and may be outdated.