Truck financing can provide the funds you need to buy heavy vehicles that keep your business running smoothly. But how do truck loans work, how can you qualify for the best truck finance rates in Canada, and can you get a loan to buy a truck if you have bad credit?
In this guide, we’ll compare six truck financing options to help you find funding that’s right for your business.
Formerly known as OnDeck Capital, Journey Capital offers business term loans and lines of credit of up to $300,000. You can get funded in as little as 24 hours, and repayment periods on a term loan range 4 - 24 months. You can also apply for commercial truck financing online with Journey Capital without it affecting your credit score.
Merchant Growth is a lender with business term loans of up to $800,000 that can be used for commercial truck financing in Canada. You can apply online in a matter of minutes, and get funds within 24 hours. Repayments are made on a daily or weekly basis over a term ranging 6 – 24 months, while Merchant Growth also offers lines of credit of up to $125,000 if your business needs flexible access to funds.
Loans Canada is an online loan search platform that provides access to Canada's largest network of lenders. After filling out a single online application, you can compare multiple loan offers. Truck loans of up to $500,000 are available, including options for good and bad credit, and you can get funded as soon as the next day.
BMO is one of Canada's Big Five banks and the country's oldest bank. It's also one of the largest commercial truck financing companies in North America and has been serving the trucking industry for over 40 years. BMO offers loans and leasing solutions to commercial trucking businesses in Canada and the USA.
If you're searching for commercial truck financing in Ontario, Global Truck Loans offers truck and trailer loans for small to medium businesses across Canada and the USA. You'll need to phone Global Truck Loans to start the application process, and this provider can then help you find a loan from its network of over 15 financing companies.
Other details
Serviced provinces: Across Canada Used truck financing available: Yes Accepts bad credit: Yes
Toronto Truck Loan offers commercial truck financing in Ontario. It works with borrowers with all types of credit, and finances all makes and models of trucks. You can start the application process by phoning Toronto Truck Loan or filling out an online contact form.
Other details
Serviced provinces: Ontario
Used truck financing available: Yes
Accepts bad credit: Yes
Loan amount
N/A
APR
N/A
Term
Undisclosed
Interest Rate Type
Fixed
Serviced provinces
Ontario
What is truck financing?
Truck financing can help provide the funds your business needs to purchase a heavy vehicle. Rather than paying the full purchase price of a truck upfront, truck financing allows you to enjoy all the benefits of owning a truck but with the freedom and flexibility to pay it back over a period of time.
However, just like any other type of commercial vehicle finance, the way truck loans work can vary substantially based on the finance option you choose.
What trucks can I finance?
There are truck financing options available to help you purchase an extensive range of heavy vehicles including:
Prime movers
Refrigerated trucks
Tilt-tray trucks
Tipper trucks
Livestock trucks
Cement trucks
Crane trucks
Car carriers
Box trucks
Water trucks
Semi trucks
Flatbed trucks
What types of truck and trailer financing are available?
There are several types of truck finance available to help you purchase a heavy vehicle for your business:
Finance lease
Under this arrangement, the lender purchases a truck on your behalf and then leases it back to you. This gives you all the benefits of ownership, including full use of the vehicle for your business, even though you don’t actually own the truck. Monthly lease repayments are required, allowing you to budget in advance, and when the lease ends you have the option to pay out the remaining value to purchase the truck.
Commercial hire purchase
If you choose a commercial hire purchase, your business hires a truck from a lender for a predetermined period. Your business doesn’t own the vehicle during this period, but you will need to make fixed monthly repayments. Once the term ends and you’ve paid off the full price of the vehicle, you take ownership.
Chattel mortgage
With this commercial truck financing option, a lender provides the money you need to purchase a truck, and you are then required to make regular repayments to pay down the loan amount. You get to immediately enjoy all the benefits of vehicle ownership and also take advantage of the security of fixed repayments. However, the lender also takes out a mortgage over the vehicle as security for the loan, and this mortgage is only removed when the loan term ends and you’ve repaid the money you borrowed.
Personal loan
A personal loan is only really an option for purchasing a truck if you’ll use the vehicle for both personal and business reasons. However, the higher interest rates that apply to personal loans mean that they are usually not a viable option for most people.
How to compare truck financing options
Consider the following factors when comparing truck financing options:
Loan term
How long will you have to continue making regular repayments towards the truck? Remember that while shorter loan terms may mean larger monthly payments, longer loan terms will increase the total cost of the loan.
Interest rate
The interest rate determines how much you will need to repay each week, fortnight or month, as well as the total cost to you over the loan term. Compare business loan interest rates across multiple finance providers.
Fees
Will you need to pay any upfront fees or ongoing monthly charges? Check the loan contract for details of all fees that apply, including penalties for late payments.
Repayment amount and schedule
Can the repayment schedule be tailored to suit your business’s cash flow? Also, take a look at how much your regular repayments will be and calculate whether this is an amount you can realistically afford.
Tax treatment
Depending on your business and the truck finance option you choose, you may be able to claim your business loan or lease repayments as a tax deduction. Ask your accountant for advice on which finance solution could be the most tax-effective choice for your business.
Commercial truck financing risks
Before you choose a truck fleet financing option, make sure you’re aware of the following risks:
Getting in over your head. Before you sign anything, make sure the regular repayment amount is at a level your business can comfortably afford.
Buying the wrong truck. Research your new truck purchase thoroughly before you commit any funds. This will ensure that you get a truck that meets all your needs and that will be affordable to own and run.
Not getting expert advice. Your accountant or a trusted finance broker can help you determine which new or used commercial truck financing product is right for your business.
How to select the right truck for your business
Consider the following factors when choosing which truck to buy:
What you need to use the truck for. Are you transporting heavy goods, refrigerated items, or do you need a tipper truck to discharge a load? Also consider who will be using the vehicle and whether or not they’ll need to obtain a special licence.
Performance. How efficiently can the truck you’re considering get the job done? Is it fast, durable and frugal with fuel?
Safety considerations. How safe is the truck for drivers and passengers? Is it easy to get in and out of the truck when on the road? Is there a comfortable sleeping cabin for drivers working longer routes?
Service intervals and maintenance needs. Servicing and maintenance costs for heavy vehicles can be very expensive, so find out what sort of regular maintenance your truck will need.
Appearance. If your vehicle is going to be all over Canadian roads and highways representing your business, be sure to choose a vehicle that’ll leave people with a good impression.
If you need a loan to buy a truck, there are multiple commercial truck financing options available. Compare a wide range of lenders and loans to find the best truck finance rates in Canada and repayment terms that suit your business.
Frequently asked questions
You can get a loan by comparing commercial truck financing providers and choosing one that offers a competitive interest rate and repayment terms that suit you. Once you've found the right loan, you can apply by providing your personal information and proof of ID, a business plan, your annual revenue and detailed financial statements. Depending on the lender, you may also be required to provide a minimum down payment.
Repayment terms of up to five years are commonly available, but some lenders will offer longer loan terms. Check with your lender of choice to find out how long you have to repay your loan and whether the repayment schedule can be tailored to suit your needs.
Yes, you may be able to qualify for a truck loan with no down payment. However, you'll generally need good to excellent credit to get funded, and $0 down loans are not available from all lenders. You may also be offered a higher interest rate than a borrower who can provide a large down payment.
Yes, you can get commercial truck financing for bad credit. While not all lenders will provide financing, there are plenty of lenders who are willing to work with borrowers who have less than perfect credit. However, the lender may require a larger down payment, while you'll also need to settle for a higher interest rate than if you had good to excellent credit.
Yes, there are lenders who can help you find financing to buy a used vehicle for your business. You can also look into getting a general business loan, which can be used to cover a wide range of business expenses including buying used vehicles and equipment.
The best rates are generally offered to operators who have been in business for several years and have a good credit history. You may also need to provide comprehensive financial statements and assets to offer as collateral.
Tim Falk is a freelance writer for Finder. Over the course of his 15-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full bio
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