Are you wondering why you should have a business credit line for your trucking company? We’ve got you covered. This article will explain everything you need about getting a trucking line of credit to your company.

The U.S. economy is dependent on the transportation industry. It’s nearly impossible to stock grocery stores or other establishments with enough food, as we saw in the Covid-19 pandemic. Without the hardworking trucking companies that bring the goods we love from one point to the next, it’s virtually impossible.

Interstate commerce cannot happen without transportation. It’s therefore important that every entrepreneur in the space to seize any opportunity presented.

Trucking companies are unique than others, but they don’t have the same entrepreneurial challenges as other industries. Cash flow constraintsspan styling=”font-weight 400 ;”>. You’ll need to purchase equipment, supplies, and you’ll also need insurance coverage once you are up and running.

These businesses have difficulty forecasting the future because fuel and vehicle prices change so dramatically each month and annually. It is impossible to predict how your expenses will change over the next 6 months or next 12 months. You also won’t be able anticipate unexpected repair costs to get your vehicle back on the road. Many entrepreneurs in this industry have to be cautious and forgo growth opportunities in order to cover future expenses because of the lack of predictability.

It’s understandable that you don’t want to stay the same. To keep your industry position, you need to continue to improve. Many trucking companies use business lines of credit to stay ahead of the curve.

For industries that have seasonality and fluctuating supply costs, business lines of credit can be a game-changer. This article will explain why you should have a trucking business line of credit.

What is a Business Line of Credit? How does it work?

A business credit line is a form of financing that allows you to access capital on a flexible schedule. You can access your credit line on an as-needed basis and interest will only accrue to the amount borrowed, unlike a loan that you have to repay in full. Revolving credit lines are also common. This means that you can borrow the same amount you borrowed previously after you have paid down your balance.

This type of financing is very different from a business credit card. A business credit card works exactly the same way as a personal credit, while a business credit line allows you to access cash in a flash. Although a business line of credit can be more difficult than a personal credit card, the benefits are well worth it.

Trucking companies often use lines credit to pay for fuel and other expensesspan styling=”font-weight 400 ;”>,, but these expenses are not the only ones you can use. If you prefer, your business credit can be used for rent, payroll, and marketing. If you are responsible with your repayments and do not overdraw your credit card, it will be much easier for you to manage your monthly expenses.

Why do you need a business line of credit for your trucking business?

Businesses of any size can use a business line of credit as a financial tool. A trucking business can use a line to finance unexpected expenses, purchase new trucks or make repairs to their trucks. Let’s look closer at the many benefits of a business credit line.

Flexibility

One of the most flexible financing options for entrepreneurs is business lines of credit. Revolving credit lines allow you to be one step ahead of any new challenge, and more importantly, allows you to plan for the future. If a growth opportunity leaves you short of funds, you won’t need to fret. Your credit line will be there to assist you with the fluctuating costs.

A business line of credit has another advantage: they are easy to get approved for. Most lenders will allow you to get a business loan if your personal and business credit is good. However, it can be more difficult if you need a larger limit. If you want to get a credit line up to $1 million, for example, you will need a better credit score, more years in business, and steady annual income.

Revolving credit

Revolving credit lets you borrow again after you have paid back thespan styling=”font-weight 400 ;”>. There is usually a limit to how much you can borrow at once. You may also be allowed to borrow money again after paying back what you owe. Revolving credit is a common type of business credit. This makes it ideal for entrepreneurs who want to be prepared for unexpected expenses.

Future Forecast

Trucking relies heavily upon commodities that have unstable prices. Forecasting is difficult because the price of fuel and vehicles fluctuates significantly both monthly and annually. A business line of credit allows you to manage the volatility in these commodities while also taking advantage of growth opportunities.

Let’s take, for example, the opportunity to purchase some routes from your competitors. Although you know that you will need additional vehicles and staff to do the job, it’s hard to imagine if you have the financial resources to pay the expenses over a few months. If you have a business credit line, you will always have extra purchasing power to pay expenses. This allows you to be less worried about the future.

A line of credit can be used to fund unexpected expenses or business opportunities. In order to be able to purchase quickly or to take advantage of an offer, it is important to have a line credit for your trucking company. A line of credit gives you the security of knowing you can get funding when you need it.

How to Apply For a Business Line of Credit

Once you have a good understanding of why your trucking business needs a credit line, you can start to prepare to apply. These are the most important steps to take:

Understanding Your Business Needs

You will first need to assess the needs of your business from both a micro and macro perspective. It’s not enough to “throw money at” a problem. Instead, you need to focus on the root cause. To get in the right mindset, ask yourself what expenses are most difficult and how much money is needed to achieve your goals. Also, consider your ability and willingness to repay the loan amount. These questions are important to ask before you begin the process. You will ensure that you don’t borrow too much or too little and, most importantly, that you use your money wisely.

Create Your Documentation

All your business documents should be prepared, including bank statements and credit information. This will make the process much faster, especially if you are applying to multiple lenders at once.

Research Lenders

Your bank, credit union or online lender can provide a line of credit to your trucking company. Online lenders have lower interest rates and stricter eligibility requirements than banks and credit unions. Marketplaces combine all of these lenders into one platform. This allows you to apply for more than one lender with one application.

Compare Their Programs

Each lender has its own eligibility requirements and each one is unique. One lender may refuse to finance your business because it is considered too risky. Another might see your operation as financially sound and offer you attractive rates and terms. You can only get the best deal if you shop around. However, this can be difficult if your trucking business is small. FinTech marketplaces like National Business Capital make it easy to find financing. They allow you to submit your application to multiple lenders simultaneously, which saves both time and effort.

Get a Business Line Of Credit for Your Trucking Business with National Business Capital

Trucking business owners know the importance of having capital to keep your business running smoothly. You don’t want to be surprised by unexpected repairs or replacement tires. This is why you should have access to credit in case of emergency.

National is here to help. National’s Business Finance Advisors are experts in understanding that business financing is not a one-size-fits all approach. To ensure we are able to connect you with the right lender for you, we get to know you and your company from the very first phone call. We are also experts in trucking business credit lines so that you can be sure we fully understand your needs.

National can help you get the financing you need to realize your full potential, without putting your company at risk. We won’t tie you down with an offer that doesn’t suit your needs. And we will always be available for you if you have any questions.

Through 25,000+ transactions , we have secured 2 billion making us uniquely qualified to help you secure the funds that you need. To get started, please complete our digital application.

FAQs

Why is a line of credit important for small business owners?

Access to short-term capital can be provided on an as-needed basis through business lines of credit. This allows for better forecasting, increased purchasing power and simplified cash flow. A line of credit allows you to focus on the larger picture and not get bogged down in the small details of your business. This financing option is ideal for small business owners who need to finance payroll, rent, inventory, and marketing initiatives.

How can I get a small business loan to start a trucking company?

However, most options for financing business are only available to existing businesses. The SBA microloan program offers funding up to $50,000 for start-up trucking businesses. You can apply for other options as you grow your business such as term loans, lines credit, equipment financing and more.

What are the benefits of having a line of credit?

A business line of credit offers the advantage of being able to access cash in a matter of minutes. This financing option is often used by entrepreneurs to support their businesses as they grow. They can use the funds to cover minor expenses that may distract from the bigger picture. Revolving credit allows you to draw the same amount once your current balance is paid. This allows you to stay ahead of any new challenge or opportunity.

What are the Cons of a Line of Credit.

High-interest rates are often associated with business lines of credit, which can be variable. Your line of credit interest rates can rise if the prime rate increases. This can cause entrepreneurs to pay higher interest payments. You may also find fees and stipulations that can complicate your use from lenders. For example, a “zero-balance” clause which requires that you maintain a zero balance on the line for a certain period of time. This is why it’s crucial to work with transparent lenders. You don’t want these fees to be discovered months later.