Vocational Truck Leasing
“Vocational Truck Leasing Available For New And Established Businesses”
The vocational truck market is continually growing as more and more equipment is being outfitted onto trucks to allow services to be transportable to wherever they are required. And with these customizations expanding to larger truck and tractor bodies, there is really no limit to what can be done with a truck these days.
With larger trucks and equipment also comes larger cost and the best way to cover off the cost of acquisition is to finance new or used units through a vocational truck lease.
Any type of vocational or specialty truck can get financed if 1) there is an existing resale market for the truck, and 2) the truck usage does not involve high mileage. For instance, a concrete pump truck certainly will have a resale market if used and its not likely going to have a great many miles on it, especially if its working in one primary geography. The key to used truck financing with respect to amount of financing, rates, and terms is the lenders assessment of the remaining useful life of the unit. The higher the useful remaining life, the more financing and leasing advantages you are likely to obtain.
The term vocation trucks refers to any type of truck that allows the performance of a specific service such as what you would find with a crane truck, concrete truck, dump truck, sweeper truck, vac truck, pumper truck, fuel delivery truck, boom truck, fire truck, garbage truck, and so on.
And compared to many other types of businesses, getting vocational truck leasing as a start up may not be as difficult as you might think. Most start up businesses have a hard time acquiring loans and leases because they have 1) several moving parts to get in place, 2) business to attract and close, and 3) cash flow to manage. Lenders and leasing companies are always leery of how well a new business owner is going transition from their theoretical business plan to practical results.
With vocational truck start ups it can be a lot easier for new businesses if certain things are in place. First, the business owner needs to have a 20% down payment with the balance to be financed through a vocational truck lease. 2) Second, the business owner or manager needs to have business already lined up with a reputable company that is prepared to provide a work contract for the term of the lease. Its ok to only have one customer if the customer is a solid company and there is a legal contract in place to perform services for a defined fee or rate.
Under this scenario, the moving parts of a new business are greatly reduced and the business owner does not have to go look for customers continuously to pay the bills each month. An owner operator with work lined up can provide a reasonable operating budget that shows the money to be earned each month according to the proposed contract and the operating costs required to perform the service.
With vocational truck financing, its very possible that a brand new business can get 80% financing on a specialty truck worth hundreds of thousands of dollars before they have earned a penny in revenue making vocational trucks and excellent way to get into business.
Structuring Vocational Truck Lease Financing
When it comes to Vocational truck leasing, you can structure a lease into a capital lease where there is a small buyout option of $500 or less at the end of the lease term or you can structure the lease as an operating lease where are least 10% of the principal is outstanding at the end of the lease term.
Because the cost of some trucks can be very high, and their useful life very long, its also to get leases structured where there is between 10% and 30% of the initial purchase amount outstanding at the end of the lease term. This can greatly reduce debt service in the short term, and at the end of the lease term the outstanding balance can potentially be refinanced into another lease provided that the units remaining useful life that support a future lease term.
If the vocational truck lease is an operating lease, the business also will have the option to return the unit to the lessor at the end of the term without any further obligation to pay.
When more established companies want to add trucks, the financing amount can go all the way up to 100% of the purchase price in some cases and in many cases fall higher than the 80% mark for new businesses providing incredible leverage for companies that utilize vocational trucks in their businesses.
If you are in need of vocational truck leasing today for a truck you want to acquire, or you want to see if you can improve upon a quotation you already have in hand, then I suggest that you give me a call at 905 690 9874 for a free assessment of your vocational truck financing options.