Do you operate with limited capital? Most small or new trucking businesses do, which can limit the pace of their growth. That’s because it takes money to set up a trucking business that can succeed. To be precise, it costs money to get the best employees and equipment for such a business.
Arguably the bigger cost of these two is the latter, though. Most of the best trucking equipment -- like good semi trailers -- is almost prohibitively expensive for a startup. That’s why small trucking businesses are rarely able to get the best semi trailers for their operations from the start.
Fortunately, there are ways to overcome challenges of this sort. For instance, there are ways to save money to increase your business’s capital or buying power. And for those who need better semi trailers in particular, there’s such a thing as semi trailer leasing.
In this blog post, we’ll give you some tips on how to do that -- semi trailer leasing, as well as money-saving for your trucking company. That way, you can free up more of your working capital while improving your business’s capabilities.
Trucking Companies’ Guide on How to Save Money
As I said above, money-saving measures and semi trailer leasing can benefit your trucking company. That’s because they help you manage your costs as well as enhance your services.
Those two things have to go together for a trucking business to succeed. It wouldn’t make sense to save money at the expense of your services’ quality, after all. Nor would it be wise to try to expand your fleet or services without regard for the rise in operating costs that might bring about. In short, the two have to be balanced for the best results.
Want to know more about these results? Let’s take a detailed look at the benefits of saving money for a small trucking business before we get to how to do it.
Why Save Money?
Cutting costs to save money can help in improving your business and its operations. The money you save can be used to pay for improvements for your business. Apart from that, you can also use the money you save for unexpected expenses. It allows you to easily cover the cost of emergencies like sudden and urgent repairs for damaged trucks.
Having more money on hand also allows you to defray maintenance costs better. This is a consideration for trucking businesses, which have to take good care of their fleets. It’s particularly important if you’re planning to do semi trailer leasing. After all, maintaining a semi trailer truck still costs a fair amount and you have to maintain the one you’re leasing.
That’s because most semi trailer leasing contracts require the lessee to be responsible for the trailer during the lease. If you don’t maintain your leased trailer, it may get damaged during use. That can lead to you spending even more at the end of the trailer lease. You may being obliged to pay for a costly repair or two due to your negligence of the semi trailer, you see.
Tips on How to Lessen Expenses
So now you know some of the concrete ways trimming down your expenses can help you. Fortunately, there are many different ways to save money for trucking companies.
You can use fuel-efficient engines to keep your gas costs low, for example. You may even look for trucks tough enough to withstand the use of cheaper gas.
Those are just two of the many possibilities. Here are some more of the best things trucking companies can do to reduce the cost of their daily operations:
Hire Experienced Drivers
It’s always a wise choice to hire experienced drivers. This can minimize accidents, which can eat up a lot of a trucking company’s capital due to the cost of repairs. If you get too many violations you can lose your DOT number. We've seen start up trucking companies hire drivers that cause problems and lose their authority to have their own customers. Which can kill a start up trucking company.
Experienced drivers can also prolong the life of your trucks. You may not even have to hire as many mechanics then, because most experienced drivers know how to maintain a truck.
Monitor Your Expenses
Monitoring your expenses may seem like an overly simple tip. However, a surprising number of trucking companies overlook it. Keeping a closer eye on what you’re spending can help you save money. It allows you to budget your working capital more evenly.
You can even track what causes the most instability in your budget by doing it. In particular, try to pinpoint how much money you make and spend daily or weekly. If possible, try to reduce the budget of the aspect of your trucking business that consumes most of your working capital.
Focus on allocating your working capital evenly throughout your trucking business. This can help you improve your trucking business without experiencing financial problems.
Maintain Your Truck Regularly
It was more or less hinted at already, but truck maintenance is another good tip for saving money. That’s because trucks are expensive. Replacing a single truck in your fleet can cost you a lot of money. It therefore makes sense to keep your trucks in good condition. Do assessments of them regularly and perform even small repairs the moment you see they’re merited.
Maintaining your trucks can prevent small wear and tear from turning into worse damage. This can reduce the possibility of your trucks needing major repairs… which can be more expensive. Furthermore, serious damage in one part of a truck can lead to a disastrous domino effect. In that way, your costs can balloon out of control.
For example, a failing radiator or fan can easily cause a truck to overheat. This can damage the engine of your truck, which means you will now have two major repairs to pay for.
All of that being said, maintenance can only do so much. At some point, equipment will wear down to the point where keeping it running costs more than replacing it. When that happens, you will have no choice but to bite the bullet and buy a new truck. Fortunately, the better you maintain your trucks, the longer it will take before your trucks need replacing.
Furthermore, once you do buy a new truck, you at least know that it will require less maintenance than your older vehicles. That means a new truck can actually help you save money too.
Acquiring New Trucks For Your Trucking Business
As just mentioned, getting new trucks can be a money-saving measure as well. It’s also one of the bigger choices you may make to keep costs down for your trucking business.
In many cases, it’s also a near-requirement if you want your trucking business to grow. Improved capabilities are practically required if you want to take your transportation company to the next level, after all. The problem is, not all trucking businesses can afford to buy new trucks right away. As noted earlier, a new truck generally comes with a big price tag. That's where commercial truck financing comes in.
Paying the whole amount for it in one go can cause significant instability in your budget. In most cases, small trucking companies can only weather it by getting a loan to cover it. However, the process of getting a loan -- from a bank, at least -- is time-consuming and requires a lot of paperwork. There’s also no assurance that you’ll get a trailer loan at the end of the process.
As such, small trucking companies may have to turn to other options. Perhaps the best of those options is semi trailer leasing.
Using Semi Trailer Leasing
Semi trailer leasing is the best option for most trucking businesses seeking to acquire new and used trailers for several reasons.
Unlike purchasing, trailer leasing doesn't require huge money outlay upfront. It breaks up the cost of a new trailer into smaller payments that you make on a monthly basis.
Furthermore, it lets you use the new trailer even while you’re still making those monthly payments. The monthly payments of semi trailer leasing are usually affordable too, if you get a good deal. This can help you preserve your business’s working capital.
Trucking businesses can get semi trailer leasing from a trailer leasing company. If you find a good company, you can even arrange flexible payment terms with them. However, your payment terms will often be affected by your credit score. If you have a good credit score (above 640), you can get fairly low monthly payments.
That said, business owners with a credit score below 600 can still get semi trailer leasing. However, their payments will be higher than usual. Which will put a dent into your ROI. So it's always a good idea to boost your credit score up before applying for trailer leasing.
Note too that a good equipment leasing company allows you to choose what will happen at the end of your semi trailer leasing. Usually, the trailer leasing company will give you an option to purchase the trailer or lease a new trailer at the end of your semi trailer leasing agreement.
Get the Best Semi Trailer Leasing
To truly save money while getting semi trailer leasing, look for a reliable equipment leasing company like Trust Capital. Respected equipment leasing companies like these can give you the best semi trailer leasing terms for your business. They can even help you pick the best semi trailer for your specific needs.
A good semi trailer leasing company can also make the approval process quick and easy. That’s a stark contrast to local banks, which will generally make you go through a dozen hoops for a simple trailer loan. For example, Trust Capital has a single-page application for semi trailer leasing on their website. You can even get approval within 2-4 hours after submitting your leasing application. You can even use their online trailer leasing calculator to check your monthly payments and get an instant leasing offer.
Generally speaking, you can get semi trailer leasing easily if you have a good credit score. Most semi trailer leasing companies will quickly approve applications from applicants with good scores.
But as I mentioned, a poor credit score doesn’t automatically mean semi trailer leasing is out of reach. Some semi trailer leasing companies -- Trust Capital is one of them -- will still approve applications from business owners with poor credit. You will have to put money down and you will have to prove you have more than enough cash flow to support you monthly payments.
Just be prepared for slightly higher payment terms, as I said earlier.
Final Thoughts on Semi Trailer Leasing
In this blog post, we talked about money-saving tips for trucking companies and semi trailer leasing. Trucking companies need to save money so they can acquire the best equipment without having to face financial problems. Trucks and trailers for trucking companies can be expensive, so budgeting is a genuine concern. Semi trailers are expensive enough, for example, that getting a semi trailer can cause instability in a business’s budget. Consider leasing a used trailer that's still in good condition to get a higher ROI. Be a good bargain shopper and lease the trailer.
Fortunately, trucking companies have several ways to overcome such financial challenges. Among other things, they can use these money-saving techniques:
- Using fuel-efficient trucks.
- Using trucks that can run efficiently even on cheap gas.
- Hiring experienced drivers.
- Monitoring expenses.
- Acquiring high-quality semi trailers through semi trailer leasing.
The last tip is particularly important for trucking companies on the cusp of growth. Semi trailers are vital for most growing trucking businesses, but are very expensive to buy.
Semi trailer leasing is the best answer here. Semi trailer leasing allows a trucking business to use high-quality semi trailers without paying huge money upfront to get them. You can arrange semi trailer leasing with monthly payments through an equipment leasing company. This can help you pay for or lease a new semi trailer without having to face financial instability. You can select an agreement to own it at the end using a ten to twenty percent TRAC lease, a $1 buy out lease or a FMV lease option.
Trust Capital is one of the best and most reliable providers of semi trailer leasing. To know more about them and semi trailer leasing, contact (866) 458-4777.