Commercial Truck Financing Requirements Explained

Start by Separating Requirements From Typical Terms

One of the easiest ways to misunderstand truck financing is to treat every number on a program page as a hard cutoff.

That is not how this program is presented.

Some items define whether a transaction fits the program at all. Other items describe how transactions are typically structured.

Knowing the difference helps you avoid ruling yourself out too early while also avoiding a truck purchase that does not fit the program.

The Firm Program Requirements

The current firm program requirements are:

• The truck must be purchased from a licensed dealer.
• The purchase price must be $21,000 to $145,000.
• There can be no bankruptcy within the last 5 years.
• There can be no repossession within the last 5 years.
• A startup must have 2 years of industry experience.

Those are different from typical down payment and document guidelines.

If the truck is being sold by a private party, that specific purchase does not fit the program.

If the purchase price is outside the financed range, that specific purchase does not fit the program.

Read more about the licensed dealer purchase requirement.

The Typical Down Payment Guidelines

For an established business, the down payment is typically 30% of the purchase price.

For a startup, the down payment is typically 40% of the purchase price.

"Typically" matters.

It means those percentages describe the normal program structure, but they should not be read as a promise that bringing exactly that amount automatically produces an approval.

The full transaction still needs to be reviewed.

See examples of how the down payment is calculated.

The Credit Score Rule

There is no minimum credit score.

HMTL specializes in credit challenged commercial truck and trailer buyers, including many borrowers with scores around 500.

No minimum score does not mean no credit review. It also does not mean every low-credit transaction can be approved.

The confirmed hard credit-history restriction is no bankruptcy or repossession within the last 5 years.

Collections, charge-offs, late payments and a low score can still be part of the credit profile without being the same thing as a numeric minimum.

Startup Requirements

A startup transaction has two important differences from a typical established-business transaction.

First, the startup down payment is typically 40% of the purchase price.

Second, the startup must have 2 years of industry experience.

The 2-year experience requirement is firm.

If you are unsure whether your background satisfies that requirement or how it should be documented, contact HMTL before committing to a truck. Do not assume that a particular job title, license, tax form or employment record automatically does or does not qualify.

Read the first-truck financing guide.

Business Bank Statements

Approximately 4 months of business bank statements is a typical program characteristic.

The exact documentation needed for a specific transaction can vary, so this should not be read as a promise that no other information will ever be requested.

The safest approach is to have the approximately 4 months of business bank statements ready and be prepared to provide additional information if the specific transaction requires it.

See the document preparation guide.

The Truck Still Matters

Meeting the basic program criteria does not guarantee approval.

The financing is for a specific truck purchase, so the truck and the transaction are part of the review.

That is one reason buyers should avoid making nonrefundable commitments before knowing whether the transaction can be financed.

You should know:

• the truck you are considering
• the licensed dealer selling it
• the written purchase price
• the cash you have available
• whether you are applying as an established business or a startup

Those facts make the conversation much more productive.

A Fast Self-Check Before You Apply

Before applying, ask yourself:

• Is the seller a licensed dealer?
• Is the truck purchase price $21,000 to $145,000?
• Do I have the cash needed for the typical down payment?
• If I am a startup, do I have 2 years of industry experience?
• Is there any bankruptcy or repossession inside the last 5 years?
• Can I provide approximately 4 months of business bank statements, or explain my current business-banking situation accurately?

If the transaction appears to fit those basics, the next step is to have the specific file reviewed.