Fresno, CA -- (SBWIRE) -- 08/14/2014 -- Understanding how commercial truck loans work is crucial when trying to lease or find a loan, as this allows businesses to improve their chances of getting approved for affordable financing options.

This starts with understanding the credit issues that commercial trucking companies look at when issuing loans. There are numerous criteria involved which a financing company considers to try to accurately determine whether a business will pay off its loan in a timely manner.

These criteria include specific information about a loan applicant company, such as the amount of time that a company has been in business. Most financing companies will prefer to issue commercial truck financing to an established business, as this greatly improves the chances that a loan will be paid back. A good credit history and strong financial records will also improve a company's chances of receiving financing at a preferable rate, so before getting financing on any type of trucking equipment, a company should prepare its financial records and be ready to present a great deal of tax and income info. A history of profitability can show a financing company that a business has a relatively low credit risk.

The other major factors are the exact equipment being financed and the type of loan that is being requested. Longer loans are more difficult to find, as they can carry a greater risk for financing companies.

It will be very difficult to receive commercial truck financing from an institution that is not familiar with the uses, benefits, and costs of the equipment that is being financed. Businesses should choose financing companies that specialize in loans for heavy-duty commercial trucks and related equipment, as these institutions will be able to accurately assess the risks of a loan and can often offer low rates to buyers. Many financing companies have lists of commercial trucks that they will finance or lists of equipment and brand types that they do not support.

When truck financing is needed, it's often possible to improve the chances of loan approval by choosing used trucks or inexpensive models. Supply as much credit information as possible and look for loans that can be paid off as quickly as is affordable. First-time truck buyers and buyers with bad credit can look for special companies that specialize in commercial truck financing for these situations. Know the terms and interest of the financing agreement and work with specialized financing companies that understand the costs and risks of the trucks that one needs. An organized approach will help any business to finance heavy trucks at an affordable rate.

Years ago, getting a commercial truck loan was as easy as proving that one could fog a mirror when it was held in front of one's face. Obviously, that is no longer the case and there is a lot more involved with applying for and being approved for commercial truck loans. As with other aspects of the economy, loan approval rates decreased dramatically during the economic downturn of 2008-09. At one point in time, a credit score of 625 or higher was sufficient enough for getting approved. Ironically, individuals today with credit scores that are 50 points higher than that are having difficulties securing commercial truck loans from some of the main stream lenders out there. However, there is more involved when we are trying to get commercial truck financing than just the credit score.

The Captive Financing Companies
There are dozens of sources for commercial truck loans. The primary ones are the financing branches of the major auto and truck manufacturers. These are technically known or referred to as the “captive” finance companies or lenders. These companies exist solely for the purpose of providing financing and loans to those individuals who want to purchase their trucks. In years gone by, their underwriting criteria were extremely liberal and some think that they more liberal than the mortgage loan industry.

The Independent Finance Companies
The primary difference between the captive finance companies and the independent lenders is that the latter is not connected in any way to the major manufacturers. They make their profits by financing a wide range of commercial equipment and machinery as well as commercial trucks. When a customer has already financed their commercial vehicles through a captive lender and no longer wants to deal with them, they turn to these “A” credit sources because of their competitive interest rates.

In-House Financing Programs
Last but certainly not least are the in-house financing programs. These financing options are typically offered by smaller vendors. However, they can be beneficial for the dealer as well as the buyer. The dealer benefits because in-house financing enables them to sell more vehicles and in most cases, they do not have a captive financing venue to rely on. Additionally, as the credit criteria have gotten stricter, the independent lenders are not the preferred option that they once were.

About Commercial Truck Loans Company Biz4loans
Biz4loans is a commercial truck financing company specializing in customers with bad credit. We finance semi trucks, dump trucks, and other work trucks for people in all 50 states. We can be contacted at http://www.biz4loans.com/commercial-truck-loans/