Equipment Financing Trucking Along
Author: Stephanie Clarke
Date posted: 11.24.22

The small business owner was aware that they required a replacement moving truck as soon as possible after losing their largest vehicle in the fleet. This moving company was in quite a bit of demand even though it was a relatively small operation. Because of the upcoming appointments with customers over the next few weeks, they required this truck. There were weeks of labor to be done in order to gain money, but there currently wasn't enough cash flow to buy a new truck outright.

When the damaged truck was brought to the mechanic, he advised the owners that it would be a waste of time and money to attempt to fix it and that they would be better off purchasing a new vehicle instead. They already possessed two additional trucks of a moderate size that they could use in the interim. Still, moving the larger houses would require a larger truck. The proprietor spent significant time searching for a pre-owned commercial vehicle on the internet and in local newspapers.

 

He was able to find a large moving truck through a private dealer, and during the discussion regarding their available financing options, they were presented with the possibility of financing their equipment through either a loan or a lease.

The lender explained the difference between a loan and a lease. After the duration of the loan, the equipment is yours to keep, and no further action is required. Once the period of the lease has expired, you have the option to purchase the equipment or return the equipment.

 

The monthly payments for a lease are typically lower than the monthly payments for a loan since you have the option to return the equipment when you are finished using it. The owner of the truck made the decision to go with the loan that required repayment over a period of four years because he intended to keep the equipment after it was paid off.

 

They were able to pick up their new moving vehicle once the paperwork was finished, and the funds were transferred directly to the private seller. Due to the fact that the truck was being held as collateral, there was no requirement for a down payment.

Because the truck was so helpful, they could take on additional customers even during the busiest part of the summer. They were able to prepay some of their payments, which knocked off six months from the length of their loan. The payments were made monthly through automatic withdrawal, leaving the business owner to worry about his customers and not his bill payments.

 

Due to the ease with which they could obtain this loan, two years later, they went through the process of equipment financing again. They purchased four additional trucks in addition to equipment such as dollies and mechanical lifts to alleviate some of the burdens their workers were under. Their company has flourished, and they are now the city’s most highly regarded moving business.

About The Author | Stephanie Clarke

Stephanie has a bachelor's degree in psychology and has been a professional writer for over 15 years. Her client list includes New York Times bestselling authors, publishing houses, prominent public figures and successful business owners. She resides with her family in Florida.

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