In the trucking industry, staying ahead means more than just keeping your wheels turning—it’s about having the financial flexibility to handle unexpected repairs, fuel costs, and fleet expansion. Whether you’re an independent owner-operator or managing a growing fleet, access to working capital is crucial for long-term success. That’s where attaining business funding comes in.
Securing a Smooth Funding Process
Securing financing for your trucking business can be a game-changer, however, many trucking business owners make avoidable mistakes that can lead to unfavorable results. To ensure a smooth funding process and the best financing options, here are key things not to do when requesting funding for your business.
Avoid These Costly Mistakes When Inquiring on Funding for your Trucking Business:
1. Disqualify Yourself Due to Your Credit Score
While many lenders consider credit scores, to us having a low score doesn’t mean you’re out of options. Our funding solutions focus on your business’s revenue and potential rather than just your credit history. If your score isn’t perfect, don’t be discouraged—we understand the challenges truckers face and are willing to work with you. Focus on showcasing the strength of your business.
2. Failing to Prepare Proper Documentation
Lenders require a variety of documentation, such as personal identification (ex. driver’s license, passport, etc.), proof of business ownership (ex. an EIN Letter), a voided check, and business bank statements. Incomplete or missing paperwork can delay or derail your processing time. Have all the required documents organized and ready before you inquire.
3. Overestimating Your Financial Health
Be honest about your financial situation. Some trucking business owners inflate their revenue or downplay expenses to appear more financially stable. Lenders conduct due diligence, and any discrepancies can damage your credibility and hurt your chances of receiving capital.
4. Attaining the Wrong Product Type
Not all funding packages are suitable for every trucking business’ need. While a term funding plan might be great for purchasing new trucks, a business line of credit or merchant cash advance is better suited for managing cash flow.
5. Taking on Too Much Debt
Lenders assess your debt-to-revenue ratio when evaluating your funding request. If you’re already carrying significant debt, adding more can raise red flags. Before inquiring about additional funding, pay down existing obligations where possible.
6. Develop a Relationship with Your Broker
Building a strong relationship with your broker can open the door to better financing opportunities. A trusted broker understands your unique financial needs and can advocate on your behalf, streamlining the funding process and securing the right capital solutions.
7. Making Large Business Purchases Before Requesting Funds
Large expenditures before requesting business funding can make your finances appear unstable. If you’re planning to inquire on business funding, avoid major business purchases that could deplete your cash reserves or impact your debt-to-revenue ratio.
8. Failing to Have a Clear Business Plan
Lenders want to see a well-thought-out business plan that demonstrates how you’ll use your funding and how you will generate the revenue to repay it. A lack of a clear strategy can make lenders hesitant to fulfill your funding request.
9. Creating Too Many Funding Requests at Once
Each funding request triggers a thorough credit assessment, which can affect your credit score. Multiple funding requests in a short period of time can make you look desperate for funds, which may make lenders wary. Choose a company you can trust, and with 15 years of experience in funding, at Global Business Lending we cater to our clients’ specific needs, getting you the best results with the least amount of impact to your financial portfolio.
Get the Financing You Need—The Right Way
At Global Business Lending, we want to help trucking businesses succeed by providing smart, transparent financing solutions. After prequalification, 80% of the funding inquiries we receive get the capital they need as quickly as same day, or within 24 to 48 hours! Avoid these common mistakes to increase your chances to secure the working capital your business needs. Stay safe on the road!
The information in this article is general in nature and is not endorsed by Eckert & Associates, P.A.
About the Author:
Jason Scott’s passion is helping business owners take their business to the next level. After receiving his Master’s Degree from California State University, Sacramento, Jason decided that working for someone else was not going to work for him. So he decided to go into business for himself. With no experience or guidance, it was a rollercoaster ride of ups and downs. Jason had to learn a lot of things the hard way, which cost a lot of money and pain. Early on Jason decided that part of his business would be to help other business owners overcome the obstacles that every business faces—one of the biggest being financing and cash flow. As a Funding Specialist with Global Business Lending, Jason combines his passion for helping others with his entrepreneurial spirit. Jason gets to help business owners grow, expand, and overcome challenges by providing funding that normal banks just cannot provide. When he’s not at the office, he’s at the gym, training in Krav Maga, or hanging at the beach with his kiddos. Give Jason a call for your funding needs at 954.239.9787, Ext 515. You can also email him at jay@globalbusinesslending.com.