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Acquiring and Financing a Semi Truck, Big Rig and Over the Road Truck
Home Autos & Trucks Trucks
By: Jm Luna Email Article
Word Count: 1283 Digg it | Del.icio.us it | Google it | StumbleUpon it

  

In today's economy, start up and seasoned businesses have an unique opportunity to acquire an attractive deal for semi trucks, big rigs and over the road trucks. The first option, for the buyer, is to visit their local dealer and find his truck there. This is great place to start and obtain pertinent information that will be used later in the data gathering process. From there, it is recommended searching the internet and its mass volume of data that is available. The potential buyer can visit such sites as truck paper and truck trader etc to view thousands of listings of trucks available across the United States. He is able to sort and sift through this vast data and should be able to find a truck, in any city and/or state across the U.S, that meets his acquisition requirements. Once he has located a source of trucks available to him, he is able to contact these sellers and negotiate a deal that might be able to meet his needs. Once he is agreed to a price and its particulars, his next hurdle is to find adequate financing in today's complex lending world of this commodity.

Today, the financing arena for semi trucks has become much smaller. Lenders, in the past, that use to finance this niche market have either pulled their portfolio funds out of this area or have modified its' lending requirements. It is not unheard of today that a start up business must commit to a down payment of between 10% - 30% of the acquisition cost of the truck to enter this market. The seasoned business with good credit might be able to get in as little as one payment down plus documents fees but must have either A or B Credit. Other seasoned businesses that don't meet these credit requirements, may be required to put up 10-20% down or either put up additional collateral as their credit scores fall below 600. Most buyers don't enjoy these tightening financial requirements, are locked out of this market, and will start looking for alternatives that are available due to market conditions. In addition to the market requirements of substantial monies due upfront, the conventional lender has modified his risk/reward factor for the failure and possible repossession of these trucks. Therefore, the rate and/or interest factor that the lender charges has gone up making it a bigger challenge to complete the financing end once the want to be buyer locates his acquisition....

As the economy has weakened due to market conditions, including diesel gas reaching $5.00 or more per gallon in certain states, the route of conventional financing has changed as we know it. The lender has acquired another problem that makes their equation a little more complicated. In the past year as the price of food has gone up, the real estate markets have taken a toll for the worse and other world factors have caused the banks to be more unstable, the trucking industry has become more volatile. As the increase of defaults on the payments of over the road trucks, semis etc have risen to all time highs, the lenders have been taking back these trucks by the droves that are earmarked as repossessions. This has caused a problem with normal lending practices and trying to balance it with a non producing income portfolio. If these lenders don't act swiftly and prudently, the combination of these two type of portfolios can be devastating to the lenders' bottom line. A third factor to consider is the off lease truck. These trucks are being returned to the lender and they must act accordingly with this third factor.

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J.M Luna has over thirty years of experience in the financial field. This includes accounting and taxes, leasing, and commercial and hard asset money loans. U.S Corporate Capital Leasing assists start up businesses as well as seasoned ones. http://www.cclgequipmentleasing.com/trader.htm

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