When you think of obtaining a truck for your business, you most likely consider traditional financing methods, like taking financing offered by the dealership or getting financing from your bank. But what if you could get that same truck for a better deal from a private party? Most business owners think borrowing through the bank or a credit union is the only method of financing vehicles or equipment for their business, but it’s not. You may be eligible to finance a truck through a private loan.
What is a Private Loan?
A private loan allows you to get financing from a lender other than your bank or dealership. Though they can be a little harder to find, it’s worth looking into, especially if the truck you want is only available from a private seller.
Private loans from an equipment financing company are helpful in unique situations. If the truck you want is too old or has too many miles on it, traditional lenders may not be willing to back the financing for the purchase. But specialty lenders understand the salvageable title of the vehicle, especially if you are purchasing commercial vehicles for a business. They may be more willing to step in and provide financing in these types of situations.
How to Finance a Private Truck Purchase
When you want to finance a truck from a private lender, you need to find a private lender willing to work with you. If you’re wondering who gives out private loans, you can start by looking at banks and credit unions. Some major banks and credit loans do offer private auto loans, but there are also online lenders and community banks that specialize in private sales and financing of trucks and equipment for commercial businesses.
Aside from finding a private lender, you’ll also need to make sure you’re able to qualify for the financing. Here are some of the factors private lenders look at when determining whether you are eligible for financing for a private truck sale:
- Credit score/credit history. The better your score or history, the more likely you are to qualify for a loan and at a better rate. However, some private lenders may work with you despite a bad credit score.
- Income. Depending on the length of the loan and the monthly payment, the lender will want to be sure your income will cover the monthly payments. Otherwise, you might not be able to repay the loan.
- Collateral, including vehicle age and mileage. Using the truck as collateral helps you qualify because it secures the loan. Newer vehicles are more favorable than older vehicles or vehicles with higher mileage, especially if you want to finance them over a more extended period.
If you purchase a truck from another business, there is an additional risk on the part of the lenders. As a result, most lenders are unable or unwilling to fund these transactions. However, when you find the right private lender, they may be willing to support private sale transactions provided proper documentation and verification.
Consider a Private Loan for Your Next Truck Acquisition
While they can be harder to find, private sale loans can provide the truck financing you need, and the lenders may even assist in the paperwork and title transfer. Lenders generally consider various factors to determine whether you qualify for a loan, including your credit score, income, and ability to repay the loan. But the advantages of a private sale, especially if it means obtaining the truck you want at the price you want, make private sales and thus private loans very appealing.