Equipment Financing for New Authorities

If you just got your authority and you need a truck or trailer, this is the overview to start with. Equipment financing for new authorities is common and doable. Here is how it works in plain terms.

What equipment financing is

Equipment financing is a loan to buy a specific piece of equipment, and the equipment itself is the collateral. That means if the loan is not paid, the lender can take the truck or trailer back. Because there is collateral, these loans are easier to get than an unsecured business loan.

What lenders look at

• Your credit score. Higher is better, but a strong down payment can offset a lower score.
• Your down payment. The bigger it is, the lower the lender's risk.
• Your time in business. New authority is fine, it just changes the terms.
• Your bank statements. Steady deposits and a healthy balance.
• The equipment. Each piece must be worth at least $15,000 to finance.

What is different for a new authority

Nothing disqualifies you for being new. Two things simply adjust:

• Down payment. Plan on 20% or more, versus 10% or so for an established carrier.
• Interest rate. Newer authority usually pays roughly 12 to 20%. Once you have 2 or more years, that drops toward 6 to 12%.

Typical terms

Most equipment loans run 36, 48, or 60 months. A longer term lowers your monthly payment but costs more interest over the life of the loan. Pick the term that gives you a payment your slowest month can still handle.

Some states are excluded

Not every lender operates everywhere. This program does not finance in California, Hawaii, Nevada, Utah, New Jersey, New York, Vermont, or Washington DC. If you operate in one of those, a local lender is your best bet.

How to line up an approval

1. Save a down payment of 20% or more.
2. Keep clean business bank statements for at least 3 months.
3. Pick equipment that meets the $15,000 minimum and fits your freight.
4. Have your CDL, EIN, entity paperwork, and insurance ready.

Want to know if your specific situation qualifies? The free checker runs your numbers against these same rules and gives you an instant answer.