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5 Common Tow Truck Financing Situations

Posted On: July 19, 2018 author Paul Kendall

When you’re looking for tow truck financing, it can be difficult for some businesses to get the funding they need to purchase or lease a tow truck. If you’re a newer business, you may have noticed it’s even more challenging to successfully apply for and receive outside financing for a new tow truck.

Thankfully, it’s not impossible to get funding in most situations, as long as you know where to look and what you can do.

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1. Leasing a Tow Truck with Ideal Credit

If your business has great credit and has been in operation for a couple of years, you’re in luck. It’s unbelievably easy to get the financing you need, but you might already know this. What some businesses don’t realize is that if you have a great business and credit history, you can usually get a great deal directly from the tow truck dealer. Sometimes you can even get financing that costs little to nothing.

2. Tow Truck Leasing with OK Credit

Even if you’ve been in business for a while and know that your credit isn’t spotless, don’t fret. It’s still pretty easy for you to get the financing you need to purchase a new or used tow truck. Tow truck leasing naturally gets easier the higher your credit score is. As long as you aim at buying a decent, used tow truck, it’s fairly easy to get the financing you need. At most you may have to make higher monthly payments than if you had near-perfect credit.

3. Getting a Tow Truck on Bad Credit

When you’re looking for tow trucks for lease on bad credit, your monthly payments will generally continue to get higher as your credit score gets lower. There are a few different avenues you can pursue if you have bad credit: cash flow (lenders will overlook your credit score if you have good enough business cash flow), collateral (to set assets aside to cover potential lending risk), and security deposits (also to reduce the overall lending risk).

4. Brand New Tow Truck Startups

As you can tell, the further down we get, the harder it gets to acquire a loan or lease from tow truck leasing companies. Due to the fact that new businesses may experience the most turbulent times in their first year, lenders are not very quick to jump the gun when it comes to providing you financing.

Ideally, you want as high of a credit score as you can get, while buying a tow truck that is less than a decade old. As credit scores get lower, the higher your security deposit and/or starting business capital will need to be before a lender feels comfortable providing you with tow truck financing.

5. Situations Where Tow Truck Financing Isn’t Available

There are, however, some situations where you won’t be able to get any outside financing. If you are starting from scratch and want to finance a tow truck, it’ll be virtually impossible to lease a tow truck. You’ll need to build up some assets, put your house up as collateral or have 50% down before a financier is going to be open to helping you out. It’s already risky for a lender to invest in a business that is both new and wants tow truck financing with bad credit.

If there are other financial complications in your personal financial history (e.g., currently bankrupt, failing to pay bills, etc.), a financier may not even consider your request for tow truck loans.

In most cases, as long as you have decent credit and have been in business for a while, you can get the financing you need. In other cases, providing enough collateral or a security deposit upfront is usually enough.

 Click here for a tow truck financing calculator to calculate how much your tow truck financing payments could be and how much of a tow truck you can afford to buy based on your monthly budget.

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How To Get Tow Truck Financing?

You can get tow truck financing from banks… but you may feel like you’d rather be having a dental root canal done instead. It takes a lot of time for the loan to be processed. And if you are in a hurry, then you won’t be able to get the money that you need.

There are other sources that offer tow truck financing. Most of them are financial companies and you can find them easily by searching through the internet.

So among those that offer auction financing online, who is among the best choices?

Experienced bidders often use auction financing by Trust Capital USA because it is easy to apply, no upfront cost is needed, and it is offered at an affordable rate.

They can quickly approve your application and provide the borrowed money quickly. Even if you had a bad credit, you are still eligible for a loan. Usually, they approve 4 out of 5 applications that they receive. Their streamlined application is quick and has no risk and no commitment.

Here are the benefits that you’ll receive once you are approved to get tow truck financing:

  • The loan will not appear on personal credit.
  • NO hard collateral required.
  • NO upfront fees - No Early Pre-Payment Penalties after 18 months.
  • Affordable and flexible monthly payment

 

How can you apply?

Trust Capital USA has a single page applicationon their website. They value their customer’s time and they provide the necessary funds easily.

What sort of tax benefits can I expect with tow truck financing?

When you structure your tow truck financing on an equipment financing agreement or on a $1 buy out lease agreement you get section 179 tax benefits. With the passage and signing into law of H.R.1, aka, The Tax Cuts and Jobs Act, the deduction limit for Section 179 increases to $1,000,000 for 2018 and beyond. The limit on tow truck purchases likewise has increased to $2.5 million.

Ready to Apply online for a tow truck financing Loan? Feel free to call Trust Capital and speak with a tow truck finance specialist that can take your application over the phone at 866-458-4777.

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