In the United States, there are approximately 350,000 independent OTR owner-operators. This accounts for 9 percent of the 3.5 million truck drivers overall. In addition, annually, there are about 500,000 accidents involving tractor-trailers. Eighty percent of which are not the fault of the operator. However, the last statistic provides little consolation after an accident. No matter who is at fault, as an owner-operator you are responsible for the overall health and well-being of your small business, including your finances. If an accident should occur, the economic impact can quickly escalate. While there are many insurance and legal resources available to owner-operators immediately following an accident, unusable equipment and resulting financial obligations may receive little consideration.
Loan Payments for Unusable Equipment
Loss of use may be first thing you consider immediately following an accident. However, your equipment payments continue. You remain contractually obligated to fulfill the payment terms of the lease or loan for your truck.
If the damage to your truck is cosmetic, the minor repairs needed will allow you to quickly continue producing revenue. However, more severe damage could leave your equipment down for a month or more. You remain responsible for making payments on your lease or loan. This can be a great strain on the independent owner-operator. Luckily, some finance companies fully understand the unique challenges small business face daily and work with you to ensure your business weathers this storm.
Equipment Finance Options
From an equipment finance standpoint, the first and most important aspect is to maintain open communication with your lender. Remember, you and your lender have an agreement making you legally obligated to fulfill the terms. If you are unable to do so, due to an accident or other major event, the lender may be able to assist and accommodate you in your situation.
What we overcame the last year and a half was extraordinarily tough. For the independent owner-operator, having an accident and a truck out of service can be just as stressful. In a time of need, an open line of communication with your lease or loan provider can yield alternative options such as restructuring your current loan or lease obligation. Deferred payments can also be used, giving you the time you need to get your business operational again.
No one wants to think about the possibility of an accident and the resulting repercussions. As an owner-operator, you must be prepared at all times. If anything, a comforting thought is knowing some finance companies are ready and willing to assist when you need it most. At the end of the day, communication with your lender is critical, so everyone can work successfully toward getting you back on the road and ensuring your business continues to thrive.