Matthew Sexton

A uniform commercial code (UCC) filing is a notice registered by a lender when a loan is taken out against a single asset or a group of assets. A UCC filing creates a lien against the collateral a borrower pledges for a business loan. The uniform commercial code is a set of rules governing commercial transactions. When a business owner receives financing secured by collateral, a lender can file a UCC lien against the assets pledged by the business owner. This secures the loan or the factoring contract. The lien prevents the business owner from selling the collateral or obtaining additional financing using the same collateral as security. UCC filings are first come, first served, meaning that if the borrower defaults on the loan, the first lender to have filed against the collateral will have the first rights to the asset. Liens automatically expire after five years, although they can be renewed on long-term loans. When Are UCC Liens Used? UCC liens are often used on non-titled equipment. While UCC filings can be used on titled vehicles, those liens are usually filed directly on the vehicle’s title. This direct form of lien filing makes it harder to transfer the ownership of the vehicle without settling the lien. Lenders can file liens on many types of assets, including: Commercial instruments Inventory Investment securities Large operating equipment Letters of credit Office equipment Real estate Receivables Vehicles Anyone can check the status of UCC filings using a public UCC search provided on the National Association of Secretaries of State website. Types of UCC filings Lenders can use one of two types of UCC liens when securing assets in exchange for financing. A lender can file a UCC lien against specific collateral, or the lender can use a blanket UCC filing to cover all business assets. UCC Lien Against Specific Collateral When a lender files a UCC lien against specific collateral, the lender secures interest in one or more assets but not against all company assets. This is most common when purchasing equipment and for inventory financing. For example, a farmer who buys a piece of farm equipment would have a UCC lien filed by the lender on just that specific piece of equipment. Blanket UCC Filing In some cases, a lien against specific collateral may not provide the necessary security for the lender. In this case, the lender would file a blanket UCC lien over all of a company’s assets. This provides more security to the lender and allows the business owner to borrow larger amounts of money. However, blanket liens can make it challenging for the business to get additional funding until the lien is satisfied or the lender removes it. The UCC-1 Financing Statement Lenders must file a UCC financing statement with the secretary of state in the state where the borrower incorporated their business. Creditors file this to make a UCC claim valid. The UCC-1 financing statement describes the lien, the identity of the lienholder, and the identity of the debtor. All UCC lien filings are public records and give notice to other potential lienholders or creditors that the assets a borrower pledges as collateral are encumbered. This secures the collateral for the lender and ensures that borrowers cannot pledge the same asset for multiple financing products. Effects of a UCC Filing A UCC lien only impacts a business if it needs to borrow additional funds or defaults on a loan. Otherwise, a UCC filing has little to no effect on a business’s operations. However, you should consider the following risks associated with UCC filings before applying for a loan: Impacts Business Credit Your business credit report will show all UCC liens for the past five years. This is an excellent way to see if there are liens on your credit that the lender did not remove after the lien was satisfied. While a UCC lien will not impact your business credit score, lenders can see existing liens, payment history, and amounts borrowed on business loans. Potential lenders can use this information in loan decisions. Prevents Use of Collateral for Other Loans If assets are tied up in a UCC filing, especially with a blanket UCC lien, a business owner will not be able to use them as collateral for additional loans. Because UCC liens are first come, first served, a lender usually will not take a second position behind a previous UCC filing because the risk is too great in case of default. Three options for getting financing with an existing UCC filing include: Asking lenders to carve out assets from the blanket lien: A lender might be willing to release some collateral from a blanket lien so it can be used as collateral for a new loan. However, this can be difficult, as the lender with the UCC blanket filing must have sufficient value in the remaining collateral to consider releasing assets. Refinance the current loan: In many cases, to change the collateral on an existing loan, the loan will have to be refinanced. In this case, the collateral can be changed so certain assets are not included in the refinanced loan. Find a lender willing to take a second lien position: Maybe the most difficult of the three is finding a lender willing to take the risk of being behind another lender in lien positioning. A business likely will have to be well qualified with strong credit for a lender to consider taking such a risk. Puts Collateral at Risk Any secured loan comes with the risk that the collateral could be repossessed if the borrower defaults on the loan. A UCC filing is no different. If a borrower defaults on a loan secured by a UCC lien, the lender can take legal action to repossess and potentially sell the collateral to avoid a charged-off loan. How to Remove a UCC Lien The first step to removing a UCC lien is to pay off the loan. Lenders are required to release the collateral from a loan when it has been satisfied. When the loan has been satisfied, the lender will file a UCC-3 financing statement amendment which removes the UCC lien. If the borrower is struggling to remove a UCC lien, they can submit a letter to the lienholder. A borrower can also swear an oath of full payment with the secretary of state’s office. The state will then remove the UCC lien. Lying about UCC liens can result in specific penalties, including fines or jail time, so be sure the loan has been paid in full before going this route. To check to see if a lien has been released, the National Association of Secretaries of State has provided links to each state’s UCC lien information. Review your initial UCC-1 financing statement for details on how the lien is listed with the state. Bottom Line A UCC filing is a common practice for lenders providing equipment financing to businesses. As long as the lien is satisfied, the only potential drawback might be the limited ability to obtain additional financing for the company until the lien is released. You should make sure liens are released after loans are satisfied so the collateral can be used for additional financing if needed.

A merchant cash advance (MCA) is a business financing product that allows companies to receive a lump-sum advance payment in exchange for a fixed percentage of their daily credit card receipts. MCAs are an expensive form of credit and should only be used as a last resort by businesses that cannot qualify for other forms of financing. The size of an MCA is based on the amount a lender is willing to advance based on the daily credit card sales of a business. The lender collects repayment using a holdback percentage or a portion of the daily credit card receivables. The total cost of the loan is calculated using a factor percentage of the cash advance. For example, a $10,000 MCA with a 1.25x factor rate would have a total repayment of $12,500. Daily payments will be taken until the loan is repaid. If a business experiences slow periods, it could extend the repayment term, or the MCA provider might require the business owner to make up the difference. There are many other types of business financing that are much more affordable. Lendio offers a variety of business financing options. Before moving forward with a merchant cash advance, visit website to see if you qualify for a more affordable business financing product. Pros & Cons of a Merchant Cash Advance Who Merchant Cash Advances Are Right For Scenarios in which a merchant cash advance is the best or only option include: Business owners unable to qualify for other financing: Almost any other type of business financing will be more affordable than merchant cash advances. An MCA should be a last resort. Businesses with unpredictable revenue: If business revenue fluctuates greatly, an MCA and its variable repayment structure may be preferable to a fixed repayment plan. However, a business owner should calculate daily payments by taking the holdback percentage and multiplying it by the average daily credit card receivables to determine the true cash flow impact of an MCA. Business owners with bad personal credit: If a business is turned down for other types of loans due to the owner’s credit score, it might be able to qualify for an MCA. However, business owners should check out other bad credit business loans, which likely will be more affordable, before considering an MCA. When to Avoid Getting a Merchant Cash Advance If you can qualify for a more affordable type of business financing, you should avoid getting a merchant cash advance. Other types of financing typically have fixed repayment terms that are easier to budget. Alternatives to a Merchant Cash Advance Before considering a merchant cash advance, look at the following types of business funding. Short-term Business Loans Short-term business loans have a quick application process, simple repayment plans, fast funding, and a lower annual percentage rate than MCAs. Business Lines of Credit A business line of credit allows business owners to draw against an established credit limit as needed rather than receiving the full amount of the loan upfront. Interest is charged on the amount used, and borrowers repay in installments. Invoice Factoring Invoice factoring is a good way for businesses that invoice their customers to receive funding quickly when cash is needed. Unpaid invoices are assigned to a factoring company, which will advance approximately 80% of the invoice upfront. The customer repays the factoring company instead of your company. Once the invoice is satisfied, the remainder of the invoice, minus fees, is distributed to your company. Equipment Loans An equipment loan is fixed financing from a lender which can be used to either purchase or refinance vehicles and heavy equipment. The purchased collateral secures the loan. Equipment loans can be secured from many sources, including banks and nontraditional lenders. Because of the strong collateral, lenders offer low rates on equipment loans, ranging from 6% to 9%. Home Equity Loans or Lines of Credit A business owner can use personal finances through either a home equity line of credit (HELOC) or a home equity loan (HEL). HELOCs and HELs use the equity in your property―usually a primary residence―as collateral for the loan. These funds can then be used for the business. In general, you’ll need to have equity in the residence, a debt-to-income (DTI) ratio of 50% or lower, and a credit score of at least 650 to qualify. Business Credit Cards Because of the high annual percentage rate (APR) involved with a merchant cash advance, even a business credit card would be a better option due to the lower APR. Business credit cards help with cash flow management and can offer perks and rewards for the business. However, they’re still best used for small recurring charges rather than large capital expenses. While they’re a more affordable credit option than MCAs, business credit cards can become expensive if debts are large or carried for a long time. Merchant Cash Advance Costs, Terms & Qualifications Merchant Cash Advance Cost Example In this example, a business owner qualifies to borrow $100,000 at a factor rate of 1.2x with a 20% holdback percentage. The business has $200,000 in monthly credit card receivables, which means the average daily credit card receivables is $6,667. If you multiply the average daily credit card receivables by the holdback percentage (20%), you get $1,333.33, which is the daily payment made on the advance. The advance will take 91 days to repay at an APR of 486.67%. Factors that increase the APR of the loan include: Borrowing more money Higher factor rates Higher holdback percentages Increases in revenue Merchant Cash Advance Providers If you find yourself in need of a merchant cash advance, it’s a good idea to shop around for the best rates and terms. Here’s our buyer’s guide with some options. Merchant Cash Advance Application Process The application process for an MCA is simple and can be completed online in a matter of minutes, allowing you access to funds in as little as one day. If you have decided to move forward with a merchant cash advance, follow these five steps. 1. Fill Out an Online Application Most MCA applications are one to two pages long and are usually found online. Once the application is submitted, the MCA provider will request additional information. An MCA application includes: Social Security number Business tax ID General information about the business Additional documentation for an MCA application includes: At least two months of credit card processing data At least two months of business bank statements Evidence of at least two years of accepting credit cards 2. Get Approved for an MCA The approval process for an MCA usually takes 24 hours or less. Once approved, the provider will notify you as to how large an advance you qualify for, the factor rate, and the required holdback percentage. At this point, take the time to determine the true costs of the merchant cash advance and consider other options before accepting the offer. Also, determine if your credit card processor will work with the MCA provider or whether you’ll have to switch processors before accepting the merchant cash advance. 3. Set Up Credit Card Processing Once the MCA is accepted, set up the merchant cash advance with your credit card processor. 4. Receive the Lump Sum Cash Advance Once the credit card processing is set up, the MCA provider will deposit the lump sum cash advance. 5. Make Daily Payments From the Merchant Account The merchant cash advance provider will begin taking a percentage of the daily credit card receipts as payment. The repayment period is variable and depends on the company’s average daily credit card receipts. Typically, it’s between 12 and 14 months. Bottom Line Merchant cash advances are an expensive form of business credit that should be seen as a last resort unless the business cannot qualify for any other type of credit. However, if you decide that an MCA is your only option, we recommend checking out merchant cash advance product.

Commercial bridge loans are flexible loans that provide short-term financing for the purchase of commercial real estate and additional funds for the rehabilitation of property—they aren’t permanent financing. In addition to funding renovations and upgrades, a commercial bridge loan can be used by borrowers who cannot initially qualify for permanent financing. Unlike permanent financing, where loans are funded based on the loan-to-value (LTV) ratio, commercial bridge loans are often based on the loan-to-cost (LTC) ratio or after-repair value (ARV). Lenders will consider a property’s current condition, renovation plans, and market conditions before approving or rejecting a project. Because these loans are based on a property’s future value, they carry more risk to the lender than permanent financing. Pricing will be determined based on the level of risk involved, with higher-risk projects carrying a higher interest rate. Because conditions can vary widely with commercial bridge loans, terms will also vary considerably based on the factors listed above. AVANA Capital is an excellent choice for entrepreneurs looking for interim financing for commercial properties. AVANA offers interest-only payments for up to three years, allowing borrowers to keep more cash on hand for other expenses. For more information about bridge loan program, check out the company’s website. When to Use a Commercial Bridge Loan Commercial bridge loans are most often used for the purchase and improvement of commercial property. Four common reasons to consider a commercial bridge loan versus other financing options include: The property has unsatisfactory occupancy rates The borrower’s credit profile needs improvement The borrower can’t wait for permanent financing Ownership interests are incomplete or there’s no project team in place Below are two examples of when to use commercial bridge loans and how they work. Using Commercial Bridge Loans to Buy & Renovate Investment Property A commercial bridge loan can allow a borrower to purchase a commercial property at a steep discount due to the property’s poor condition or the market conditions surrounding the property. Lenders will assign a TC for the renovated property, including the purchase price and the cost of the needed improvements. This will likely be the limit to which the customer can borrow. In most cases, the borrower will be limited to 80% of the LTC value for the commercial bridge loan. The renovated property can then be sold for a higher value, allowing the borrower to pay off the bridge loan and make a profit on the project. Other Ways to Use Commercial Mortgage Bridge Loans There are three other ways to use a commercial bridge loan: When a borrower cannot qualify for permanent financing. The temporary financing can be used to resolve credit issues that allow the borrower to eventually qualify for permanent financing at the end of the project. When a borrower has a limited time window for purchasing a property the ability to secure financing quickly. Permanent financing often requires the project to be finished before the loan is closed. When a borrower wishes to purchase and develop raw land, demolish existing structures and rebuild, or to purchase, renovate and sell existing properties. Commercial Bridge Loans: Terms, Rates & Fees The amount of the loan for which you are eligible will be determined by a combination of property value, cash flow generated, and your net worth. The lender will typically loan between 65% and 80% of the LTC and 80% of the LTV of the finished value of the property. Qualifying for a Commercial Mortgage Bridge Loan Qualifications for commercial bridge loans will vary between lenders. The general qualifications required by most lenders are: Debt Service Coverage Ratio The debt service coverage ratio (DSCR) measures the borrower’s ability to handle the new debt obligation. It takes the business’ annual net operating income and divides it by the current year’s debt obligations, including the debt obligation on the new loan. Lenders will typically require a DSCR of 1.25 or greater. Experience The longer the borrower’s business has been operating, the better chance the loan will be approved. In addition, the lender will consider the borrower’s history of renovation projects when considering their qualifications. Net Worth Commercial bridge loans will generally not exceed the total net worth of the individuals applying for the loan. A financial statement for each individual and the business will be required at the time of application. Borrowers can use our free net worth worksheet to calculate and document net worth. Cash Reserve In addition to overall net worth, borrowers will need to show sufficient cash reserves for potential contingencies. Borrowers may hold back a certain amount of loan proceeds as an interest rate reserve. This allows the lender to draw payments from the fund while the property is in renovation status and not generating full cash flow. Credit Score As with all loans, the higher the credit score, the better terms the borrower can receive. Most commercial bridge loan providers will require a credit score of at least 650. However, the credit score is not the only factor considered. Often, the borrower’s DSCR will weigh more heavily in the credit decision than the credit score. Documentation While documentation varies for each lender, the following list of documents may be required by the borrower at the time of application: Personal and business tax reports Personal resume Income and expense statements from previous property owner Rent rolls (a free template is available here) Schedule of leases Executive summary or action plan Breakdown of renovation costs and project schedule Exit strategy (sale or refinance) Broker’s letter of value Where to Find a Commercial Mortgage Bridge Loan Commercial bridge loans can be obtained from local or regional banks or online lenders. See our buyer’s guide for the best commercial mortgage bridge loan providers. Bottom Line For businesses looking to purchase a property that needs extensive renovations, commercial bridge loans can provide the needed funds. Commercial bridge loans can be used for many types of properties, including multifamily residential, retail, office, and industrial properties. When the project is completed, the borrower can sell the property for profit, or the loan can be refinanced into permanent financing, allowing the borrower to continue to own the property.

Commercial bridge loans provide short-term financing for the purchase of commercial real estate and additional funds for the rehabilitation of a property. While there’s flexibility in commercial bridge loans, they aren’t permanent financing. In addition to funding renovations and upgrades, a commercial bridge loan can be used by borrowers who cannot initially qualify for permanent financing. Commercial bridge loans can be obtained from local or regional banks or online lenders. Listed below are the four best options from which to choose. AVANA Capital is a direct lender that provides commercial bridge loans, construction loans, and SBA 504 loans. Loans through AVANA range between $3 million and $25 million. Preapproval is promised on its website in as few as three days. While the turnaround time usually falls between 45 and 60 days, it can be as little as 10 to 30 days. AVANA has provided commercial bridge loans to industries, such as hospitality, owner-occupied real estate, and renewable energy, among others. We like AVANA due to the high maximum loan amount, competitive rates, and quick preapproval and turnaround time. Bloomfield Capital Available nationwide in all states besides Nevada and California, provides commercial bridge loans of up to $20 million. The longer repayment period is attractive to potential borrowers, with up to three years to either sell or refinance the loan. Bloomfield offers many uses for funding, including highly structured transactions, discounted note payoffs, property acquisitions, recapitalizations, rehabilitation, lease-up, partner buy-out, and more. Bloomfield positions itself as a strong choice for urgent funding needs. Arbor is another nationwide lender that offers a variety of mortgage loan products, including commercial bridge loans. It’s an attractive option for businesses that aren’t sure that 36 months will be enough time to complete a project, as extension options are available. With rates as low as 6.5%, Arbor offers some of the best rates on the market. Some fees could be waived if permanent financing is also secured through Arbor. One advantage Arbor has over the other lenders listed here is with nonrecourse loans. This means the borrower isn’t personally liable for the loan, so personal taxes likely won’t be required. However, a personal credit score of at least 680 may be required to show the borrower’s ability to secure permanent financing. C-Loans.com Unlike the other options listed here, isn’t an individual lender but rather a broker that uses as many as 750 lenders to secure the best commercial bridge loan option for the borrower. The terms listed here are guidelines for what a borrower will find through C-Loans.com. Still, with so many lenders, the ultimate terms will be determined by how well qualified the business is and the circumstances of the property purchase. Extensive documentation is required when using C-Loans.com so the loan can be shopped around to as many lenders as possible. However, because of this, well-qualified borrowers may find better terms than from the three independent lenders listed. How We Evaluated the Commercial Bridge Loan Providers When evaluating commercial bridge loan providers, we considered the minimum and maximum loan amounts, the potential interest rates, and the turnaround time for both approval and loan closing. Some lenders offer nonrecourse lending, which is advantageous because it removes the repayment liability from the individual borrower. General qualifications only differ slightly between the four options listed, so the borrower should consider what factors are most important before applying. Bottom Line A commercial bridge loan is an excellent lending product for businesses looking to purchase and renovate a property. Depending on the desired repayment term, the amount desired, and the long-term plan for the property, each of the four lending options listed above have terms that might fit one business better than another.

For individuals looking to acquire an existing business, a loan is usually necessary to obtain the required capital. Not only can the loan be used to purchase the business, but it can also give a borrower the cash flow necessary to ensure a successful start to the business. Typically, a down payment of at least 10% will be needed. Interest rates start at 5% and go up from there, with a term of between three and 25 years. Before beginning the process of getting a loan to buy a business, the experts at can assist with the valuation of the company being acquired. Guidant also has funding options, including rollover for business startups (ROBS) financing. Check out Guidant’s website for more information or to begin the funding process. The following are the seven steps needed to get a loan to purchase a business. 1. Gather the Required Documentation No matter which type of financing a business owner goes with, there will be specific documentation required. Not only will the lender require this documentation, but it is also likely that the company being acquired will want to verify this information to make sure the potential buyer has the assets to complete the business purchase. The exact documents required will vary depending on the financing option, with Small Business Administration (SBA) loans typically requiring the most documentation. When applying for a loan to buy a business, the documentation usually required includes: Purchase contract for the business Business and personal tax returns (prior three years) Balance sheet and profit and loss statement (year-to-date) Information on outstanding business debts Complete list of business assets, including year, make, model, mileage, and hours Rent rolls if the business has tenants Business lease Organizational documents for the business like articles of incorporation Business licenses 2. Make the Initial Inquiry Once the documentation has been gathered, the potential buyer must reach out to the business to express interest in purchasing the company. At this point, a nondisclosure agreement (NDA) will likely be required so basic information about the business can be shared between the two parties. Next, the potential buyer should review this information and research any additional information. This process should take around a week. 3. Make a Data Request If the potential buyer wishes to continue after the initial investigation, a data request usually follows. This allows the buyer to request records such as financial statements. This information may also be required by the lender chosen in the next phase of the process. Researching the valuation of the business through valuation calculators will allow the potential buyer to begin planning for the upcoming loan request. In addition, it will allow the buyer to determine the amount of financing needed and what kind of down payment may be required. 4. Choose the Right Type of Loan SBA Loans The top choice among business acquisition loans is an SBA loan. SBA loans have the most competitive interest rates and the longest repayment terms. However, qualification can be difficult, and the process can take between 45 and 90 days. Buying an existing business with an SBA loan is easier than using it for startup financing because the lender can look at the business’s financial records instead of relying on the projections of a new business. Because the SBA guarantees the loan, it is safer for lenders. Even if the borrower doesn’t have enough collateral to secure a traditional loan, they may qualify for an SBA loan. Pros and Cons of an SBA Loan SBA Loan Terms and Qualifications As with traditional business loans, an SBA loan typically requires a credit score of at least 680, along with industry experience and a strong business plan. In addition, collateral may be necessary. The loan amounts and down payment requirements for SBA business acquisition loans are: Loan amount: Up to $5 million Down payment: At least 10% to 20% of the purchase price Guarantee fee: 2% Packaging fee: $2,000 and up The interest rates on SBA loans vary and are based on the U.S. prime rate. Those rates are updated on our SBA loan rates page. Repayment Schedule The maximum terms for SBA 7(a) loans to buy an existing business are: Inventory or working capital: Up to 10 years Equipment, fixtures, or furniture: Greater of 10 years or the useful life of the collateral, not to exceed 25 years Commercial real estate: Up to 25 years How to Qualify for an SBA Business Purchase Loan It can be challenging to qualify for an SBA loan. Generally, there are five factors the SBA will consider: Personal credit score: A credit score of 680 or higher will be required. Down payment: A down payment of 10% to 20% is likely, but some will need at least 30%. Collateral: Real estate is the best collateral, but other collateral, such as vehicles, accounts receivable, or other business assets, may be acceptable. Industry experience: The SBA prefers borrowers with industry experience. Financially strong business: Existing businesses with a track record of success are attractive to the SBA for loan approval. SmartBiz is an excellent broker for SBA loans to buy a business. For more information on SBA loans or to apply, check out . ROBS A ROBS allows a business owner to invest funds from a personal retirement account into a new business without paying early withdrawal penalties or income taxes. It is not a business loan or a 401(k) loan, which means there is no interest or debt to repay. The funds can be available from a ROBS provider in two to three weeks, which is faster than an SBA loan. Because buying a business can be a time-sensitive process, acquiring funding in a shorter amount of time can increase the probability that the acquisition will be successful. Pros and Cons of ROBS ROBS Cost and Qualifications The cost of using a ROBS for financing the purchase of an existing business are: Setup fees: $5,000 at initiation Management fees: $130 per month To qualify for and use a ROBS, you must: Contribute $50,000 or more from your retirement savings: For a ROBS to be a good choice, the business owner must have at least $50,000 in a deferred retirement account. The business owner must then be willing to use that money to fund the business through a ROBS. Be an employee of the business: The business owner must be a legitimate employee of the business the funds are being rolled into. A ROBS is an ideal choice for an actively managed business but not a great choice for an absentee business, such as some real estate investment companies. Structure your business as a C corporation (C-corp): To set up a ROBS, the company must be structured as a C-corp. Be able to fund the setup costs: The setup fees of $5,000 must come from funds outside of the deferred retirement account. However, the monthly fees can be paid with any funds, including the ones rolled over for the ROBS. Where to Find a ROBS For more information on ROBS financing, check out our article on the best rollover for business startup financing providers. In addition, we recommend Guidant Financial to assist with the proper setup and execution of a ROBS account. Check out the website for more information on ROBS or to speak with a ROBS specialist. Seller Financing Seller financing occurs when the business owner selling their business to a potential buyer agrees to finance part or all of the purchase price. With seller financing, the seller typically finances 15% to 60% of the purchase price. This allows potential buyers with subprime credit to get better interest rates for financing the purchase of the new business. Pros and Cons of Seller Financing Other benefits to using seller financing to buy an existing business include: Confidence in the business is increased: Seller financing can give you more confidence since the current owner is willing to invest in your success. All or some of the purchase costs are covered: Seller financing, or seller carry-back financing, can be used to cover all of a buyer’s purchase or just a portion. If the seller financing only covers a part of the acquisition cost, the buyer will often make up the difference with cash, HELOC, or SBA loan. Seller Standby Note Some business owners will use seller financing to satisfy requirements for an SBA loan or other down payment requirements. This may require the seller to put up collateral during the term of the loan. A financial expert should be consulted throughout the process to make sure all parties are aware of the risks involved and the potential liability in the event of loan default. HELOC or HEL A HELOC is a revolving line of credit with the potential buyer’s home held as collateral against the loan. It is often a second lien on the property behind the primary mortgage. Money can be drawn and repaid as long as the line of credit remains open. At maturity, the line of credit can be renewed, paid off, or extended. A home equity loan is a lump sum loan against the equity of a property, also usually a second lien on the property. This type of loan often has fixed payments, with repayment complete at maturity. Pros and Cons of a HELOC or HEL Terms and qualifications for a HELOC or HEL Both types of funding require equity in the property being held as collateral. The typical requirements for a home equity loan or line of credit are: Equity: At least 20% equity in your home; rule of thumb is between 30% and 40% minimum Maximum loan-to-value (LTV): 80%, based on the appraised value of your home Credit score: At least 620—preferably 680 or higher 5. Sign a Letter of Intent Once the financing has been preapproved, the potential buyer will sign a nonbinding letter of intent (LOI) showing the expected purchase offer. Upon accepting the offer, the seller will want to know how the buyer intends to purchase the business. The preapproval letter will show that the buyer is qualified for financing. At this point, initial negotiations regarding sale price and terms will take place. This process should take one to two weeks. 6. Go Through the Full Company Review Upon signing of the LOI and while the financing process continues, the buyer will review all available information on the company they are purchasing. During this one- to two-month period, the buyer will determine whether or not to proceed with the purchase. 7. Sign the Purchase Agreement Once financing is completed and terms agreed upon, the parties will finalize negotiations on terms and prepare closing documents. The documents will be signed, and the deal will be closed at this stage. The loan should be wrapped up before this stage so closing deadlines can be met and the deal doesn’t fall through at the last minute. It can take anywhere from a few days to a few weeks to wrap up this final stage. Bottom Line Potential business buyers have many options available for funding a purchase. Be sure to consult a financial advisor and a legal expert to find the best options and ensure the business is correctly set up to be purchased. SBA loans are the best way to receive funding, but it is essential to know what is required before applying. ROBS financing is also another good option. Stop by website for expert advice and options for business acquisition funding.

Business loan brokers connect borrowers to a network of lenders, giving them several options for financing with a single application. The goal of brokers is to provide borrowers with the best rates and terms, typically at no cost. Here is our recommendation for the top six small business loan brokers for 2021: Lendio: Best Overall for Flexible Lending Options With more than 300 lenders in its network, a quick application process, and fast funding, is our choice for the best overall business loan broker. Lendio has funded more than 300,000 business loans for a total of more than $12 billion. Lendio offers a 15-minute application, with funding in as little as 24 hours. There is also no fee or obligation to Lendio. Lendio offers access to several types of funding, including: Lines of credit Equipment financing Short-term loans Accounts receivable financing Loans through the paycheck protection program SBA loans Business credit cards Commercial mortgage loans In addition to the online component of Lendio, there are physical branches throughout the United States for businesses that wish to discuss financing options in person. Credit scores and time in business requirements vary depending on the lending product selected. On average, borrowers need to be in business for at least 12 months with personal credit scores of 650 or higher, although businesses that don’t meet those requirements can still qualify for loans through the Lendio network. LendingTree: Best for Comparing Offers for Well-qualified Borrowers For well-qualified borrowers, is an excellent option as a loan broker. Lenders in its network compete for the borrower’s business, ensuring the borrower gets the best available rates and terms. While LendingTree does not charge fees to the borrower, it charges fees to lenders to be in the network. Those fees may be passed on to the borrower, so be sure to check for any fees before closing. Lending Tree offers access to the following types of funding: SBA loans Short-term loans Long-term loans Business lines of credit Working capital loans Equipment financing Accounts receivable financing Merchant cash advances LendingTree notes that its lenders may consider credit scores as low as 500. However, higher fees and rates may apply. Most traditional banks and credit unions in LendingTree's network require credit scores of 680 or better. SmartBiz: Best for SBA or Term Loans With an extensive network and a focus on SBA loans and term loans, is a strong choice. SmartBiz states that 90% of the applications it receives end in approval from its network of lenders. The company offers SBA loans at rates between 4.75% and 7% for amounts between $30,000 and $5 million, with repayment terms ranging from 10 to 25 years. In addition to SBA loans, SmartBiz’s network has funded paycheck protection program (PPP) loans. In total, the company’s network has financed nearly $4 billion in SBA 7(a), PPP, and bank term loans. SmartBiz offers access to the following types of financing: SBA loans Term loans Commercial real estate loans Nontraditional business loans SmartBiz uses a soft credit pull to get the application started. Once the application review process is completed, a hard credit pull is taken. Generally, businesses will need to be in operation for at least two years. For loans up to $350,000, the business owners will need a credit score of 640 or higher. For larger loans, owners will need a minimum score of 675. National Business Capital: Best for Bridge Financing Combining Short- and Long-term Loans offers access to loans similar to those offered by SmartBiz, with slightly higher qualifications required. To qualify for an SBA loan with National Business Capital, the borrower must be in business for at least two years, have at least $100,000 in annual gross sales, and have a credit score of 685 or higher. National Business Capital offers a product called a Hybridge® SBA Loan, which serves as a bridge loan while the SBA loan is being funded. National Business Capital offers access to several different types of financing, which include: Business lines of credit Equipment financing SBA loans Accounts receivable financing Startup business financing Franchise financing Commercial mortgage financing Purchase offer financing Asset-based lending National Business Capital does not require a minimum time in business or a minimum credit score for equipment financing through its network. However, for business lines of credit, a minimum of one year in business is required. For either, a business must have a minimum of $120,000 in annual gross sales. There are no upfront fees, but you should watch for fees being passed on from lenders to borrowers. Biz2Credit: Best for Options for Both Traditional and Nontraditional Lending offers many different options for businesses looking for funding through loan brokers. With applications taking 4 minutes and loans being funded in as little as 24 hours, Biz2Credit is another good option to consider. It has helped more than 200,000 businesses receive funding, and it offers loan amounts ranging from $25,000 to $6 million. Term loans go up to $250,000, working capital loans up to $2 million, and commercial real estate (CRE) loans up to $6 million. Funding can happen in 24 hours or less, except for CRE loans, which are funded in 30 days or less. Biz2Credit offers access to several types of financing, including: Term loans Working capital loans Commercial real estate loans For working capital loans, annual revenue must be at least $250,000. In addition, borrowers must be in business for at least six months with credit scores of at least 575. For term loans, the revenue requirement is the same, although the credit score must be at least 660, and the company must be in business for at least 18 months. GoKapital: Best for Financing for High-risk Industries As long as a business has at least $30,000 in monthly revenue, promises financing regardless of credit score. This makes GoKapital a good choice for low-credit-score borrowers. After filling out a 2-minute application, GoKapital promises quick approval and immediate access to funds. While some lending products require one year in business and $30,000 in monthly revenues, the SBA 7(a) loans offered through GoKapital have higher qualification standards. Businesses must be in operation for two years and have $250,000 in annual revenue and profitability. Closing on those loans is promised in three to six weeks. Loan products offered through GoKapital’s brokerage include: Business cash advances Business lines of credit Unsecured business loans Equipment financing SBA 7(a) loans Commercial real estate financing In addition to offering loan opportunities to low-credit-score borrowers, GoKapital also provides loan offers to higher-risk industries. This includes funding to cannabis industry businesses, medical businesses, and ecommerce businesses, among others. How Financing With a Business Loan Broker Works Most loan brokers will use a soft credit check to gain initial qualification for businesses looking at multiple funding options. Once the borrower chooses the loan option that works best, a hard credit pull will accompany the final application process with the lender. For many types of lending, the application process is short, with funding in 24 hours or less. Who Should Work With a Business Loan Broker Business loan brokers are perfect for small businesses that don’t have the time to go from bank to bank seeking funding. Also, they can be another funding option for businesses that traditional lenders have turned down. The following businesses should consider using a loan broker on their next loan: Newer businesses: Brokers can provide many options to new businesses that aren’t available through traditional lenders. Borrowers with poor credit: Brokers have access to more lenders, which allows them to find lenders willing to provide loan offers to subprime borrowers. Borrowers that have been rejected for financing: If traditional lenders won’t work with a company, brokers can find online and nontraditional lenders to finance loan products. Businesses in high-risk industries: There are still industries, such as the cannabis industry, that some traditional lenders cannot or won’t fund. A loan broker can find specialized lenders to help borrowers in high-risk industries. Disadvantages of Business Loan Brokers The one issue that businesses may find when working with a loan broker is higher closing costs and fees attached to a loan. While many loan brokers don’t directly charge fees to the borrower, many of them charge fees to the lenders in their network. Those fees can be passed along to the borrower, which results in higher payments. How We Evaluated Small Business Loan Brokers Borrowers looking for a loan broker usually have a specific need that a traditional lender cannot fill. It may be because the business is in a high-risk industry or has been turned down by a traditional lender. It can also be that the borrower is savvy and wants multiple options for finding the best rates and terms. We considered five factors when ranking the top loan brokers for 2021: Types of loans offered: Available loan options and funding specialization of each broker Minimum qualifications: Whether qualifications are listed and how restrictive they are Industries served: Whether brokers specialize in certain industries or serve a wide range of customers Online reputation: Online ratings for each company and red flags for borrowers Transparency of fees and terms: Brokers being honest about upfront costs and how they get paid Bottom Line While all loan brokers on this list can help businesses secure multiple types of funding, we recommend Lendio as the best overall loan broker for 2021. It has a large variety of lenders with rapid approvals and funding. Check out website for more information or to begin the application process for a business loan.

Equipment leasing allows businesses to acquire equipment without purchasing it. Leasing agreements can be obtained from some of the same sources as equipment loans: banks, dealerships, equipment manufacturers, and even nontraditional financing companies. Lease payments are often significantly lower than loan payments, although balloon payments may be due at the end of the lease. Smarter Finance USA offers equipment leasing for new and used heavy equipment. Requirements include a credit score of at least 600 and at least 5% down. Borrowers who qualify can secure financing of up to $250,000. Visit website for more information or to apply for lease financing. How Equipment Leasing Works Leasing requires businesses to make regular payments in exchange for the use of equipment. It is ideal for companies that need equipment that may have to be upgraded regularly or equipment that would be too expensive to purchase outright. Depending on the type of lease, the borrower may gain ownership of the equipment, or there may be no transfer of ownership. Equipment leases usually fall into one of two categories: Capital lease: The business receives all benefits and drawbacks of ownership. The most common form of lease, a capital lease, is best for expensive equipment that a business intends to keep long-term. With a bargain purchase agreement, the business gains ownership at the end of the lease. Operating lease: The business doesn’t receive benefits and drawbacks of ownership with an operating lease ― it is simply a rental. Ownership doesn’t transfer upon the completion of the lease, which is ideal for items that need frequent replacement due to short useful life. Equipment Lease Qualifications, Rates & Terms Equipment lease qualifications are often similar to equipment loan qualifications. The equipment is used as the collateral for the lease, meaning rates are lower than using an unsecured line of credit to purchase equipment. 5 Factors That Determine Qualification As is the case with equipment financing, several factors determine the likelihood of approval when obtaining an equipment lease. Those factors include: Credit score Business history, including time in business and annual revenue Type and size of the lease Length of the lease How well the equipment keeps its value as it depreciates Businesses will need to provide at least one year’s worth of income tax returns; however, two or three may be required by some lenders. Interest rates will be better for well-qualified borrowers, with some lenders offering rates as low as 6% for equipment leases. To determine how much an equipment lease may cost, you can try our equipment lease calculator. Equipment Lease Tax & Accounting Treatment As with equipment purchases, equipment leases can be deducted from your business taxes in certain circumstances as you can claim the depreciation on the equipment. In some cases, the entire amount of depreciation can be claimed in year one instead of graduated depreciation during the life of the lease. As always, consult your tax professional for guidance on the tax benefits of leasing. 5 Types of Equipment Leases There are five common types of equipment leases, each with advantages and disadvantages depending on tax implications, monthly cash flow considerations, and ownership considerations at the end of the lease. We recommend speaking with a certified public accountant (CPA) or tax professional about these options before you decide. $1 Buyout Lease A $1 buyout lease is similar to an equipment loan. Borrowers make payments to rent the equipment, and at the end of the lease, have the option to purchase the equipment for $1. This makes the payment size the highest of any of the lease types. The asset leased and liability will show up on your balance sheet. Interest rates will be the lowest on this type of lease. Use this type when you want to own the equipment at the end of the lease. $1 Buyout Lease Tax and Accounting Treatment Here are some potential tax and balance sheet implications of the $1 buyout lease. Consult your tax professional for more information. Depreciation: Under Section 179, equipment value can be deducted up to $1 million Payment deduction: Interest payments can be deducted as interest expense Balance sheet: The equipment will be listed as an asset and a liability Who it’s best for: This is best for borrowers who want to purchase the equipment but want to spread out the cost of the equipment into equal payments instead of having a larger lump sum at the end of their term. 10% Option Lease Like the $1 buyout lease, a 10% option lease allows the borrower to make payments and have the option to purchase the equipment for 10% of its initial value at the end of the lease. For example, a $50,000 piece of farm equipment would have a final payment of $5,000 at the end of the lease to transfer ownership. The monthly payment would be lower on the 10% option lease than the $1 buyout lease, with the larger balloon payment held at the end of the lease. While the 10% option lease can be used for equipment that a borrower would want to gain ownership of at the end of the lease, the borrower would also have the option to walk away at the end of the lease, foregoing the 10% payment and returning the leased equipment. 10% Option Lease Tax and Accounting Treatment Here are some potential tax and balance sheet implications of the 10% option lease. Consult your tax professional for more information: Depreciation: Under Section 179, equipment value can be deducted up to $1 million Payment deduction: Interest payments can be deducted as interest expense Balance sheet: The equipment will be listed as an asset and a liability Who it’s best for: This type of loan is best for businesses that aren’t sure whether they want to purchase the equipment at the end of the term. Fair Market Value Lease A fair market value (FMV) lease allows the borrower to make payments and use the equipment throughout the lease and allows the borrower to purchase the equipment at the end of the lease for fair market value. Borrowers can also choose to renew the lease or return the equipment at the conclusion of the lease. In contrast to the first two types of leases discussed here, the borrower does not get the benefits or drawbacks of ownership. It also means that only monthly payments can be deducted from the lessee’s taxes. These leases are the hardest to qualify for, meaning a strong credit score and high annual revenue are needed and, usually, the equipment leased must be a high-value item. This is not an ideal lease type if a borrower plans to purchase the equipment at the end of the lease. Monthly payments are lower, but the interest rate will often be higher than the $1 buyout or the 10% option because the lessor has a higher risk due to the likelihood of having to find another renter for the equipment. FMV Lease Tax and Accounting Treatment Here are some potential tax and balance sheet implications of the FMV lease. Consult your tax professional for more information: Depreciation: Not available Payment deduction: Only full payments can be deducted as operating expenses Balance sheet: The equipment must be listed as an asset and a liability Who it’s best for: An FMV lease is best for businesses acquiring equipment that they know they will replace at the end of the term or equipment that has a very short shelf life. 10% Purchase Upon Termination Lease The 10% purchase upon termination (PUT) lease is the same as the 10% option lease with one significant difference: the borrower does not have the option to walk away. This decreases the risk for the lessor because the lessee must purchase the equipment at the end of the lease. Also, this makes it easier for borrowers to qualify for 10% PUT if they have bad credit. All other information regarding payments and tax implications from the 10% option lease apply here. 10% PUT Lease Tax and Accounting Treatment Here are some potential tax and balance sheet implications of the 10% PUT lease. Consult your tax professional for more information: Depreciation: Under Section 179, equipment value can be deducted up to $1 million Payment deduction: Interest payments can be deducted as interest expense Balance sheet: The equipment will be listed as an asset and a liability Who it’s best for: This type of lease is best for businesses that want to purchase the equipment at the end of the term but need a lower payment than the $1 buyout or 10% option leases would provide. Terminal Rental Adjustment Clause Lease A terminal rental adjustment clause (TRAC) lease is typically used for semi-trucks and other vehicles. It can be either a capital or operating lease. This lease gives the lessee flexibility to set up a higher balloon payment at the end of the lease, which is why it is ideal for truck or vehicle loans. It has lower monthly payments throughout the lease because of the higher balloon at the end. Borrowers should have strong credit profiles because of the increased risk to the lessee with the high balloon at the end. This type of lease is used when the lessee doesn’t want to own the asset at the end of the lease, usually because they want to upgrade to a newer-model vehicle. TRAC Lease Tax and Accounting Treatment Here are some potential tax and balance sheet implications of the TRAC lease. Consult your tax professional for more information: Depreciation: If it is a capital lease, it can be depreciated. Operating leases cannot be depreciated. Payment deduction: Full payments are deductible if it is an operating lease. Otherwise, interest paid can be deducted in a capital lease. Balance sheet: This will be listed as an asset and a liability in most cases. Check with your tax professional. Who it’s best for: A TRAC lease is only for vehicle purchases or leases and is right for those who need more flexibility in deciding how much to pay at the end of the term if they want to purchase the vehicle. When to Use an Equipment Loan Instead Many equipment leases are very similar to equipment loans. One of the biggest differences is that equipment loans always result in a transfer of ownership at the end of the loan. Also, loans can be paid off early with no prepayment penalty. For businesses looking to upgrade equipment at the end of a repayment period, leases give the borrower more flexibility. In some cases, lessees can walk away from a balloon payment at the end of a lease, making for lower monthly payments than loans with no ownership requirement at the end. Businesses should consider the following when deciding between a lease or a loan: Are lower payments necessary? Leases often offer lower payments. Is ownership necessary or desired at the end of payments? This is guaranteed with loans, although certain types of leases allow for this as well. Will the borrower look to upgrade at the end of payments? Leases make more sense for businesses looking to upgrade because, with many leases, they will be walking away from balloon payments. Bottom Line Many factors go into the decision to get an equipment lease ― as opposed to an equipment loan ― and the type of equipment lease. Consult a tax professional on all large capital expenditures to determine the best course of action for the business. In many cases, leases make sense, especially if the business intends to upgrade equipment at the end of the lease or if it needs lower payments provided by leases with balloon payments at the end. If a business wishes to lease equipment to gain ownership at the end, a $1 buyout lease or a 10% PUT lease makes the most sense.

Purchasing a new or used semi-truck for your business is one of the most significant financial decisions you will ever make. The process can be lengthy and complicated. This guide will help reduce the stress of figuring out how to get a loan for a semi-truck. Included are general guidelines on the qualifications needed for financing, suggestions for lenders that can finance your new truck, and red flags that lenders will look for in the process. This guide aims to show you how to finance your semi-truck as quickly and easily as possible. 1. Determine Eligibility Every lender will have slightly different requirements for borrowers on how to get semi-truck financing. Confirm the specific requirements with your chosen lender. Here are some general eligibility guidelines to keep in mind when beginning the truck financing process: Minimum credit score: 600 (credit scores below 600 will be considered, but likely at a higher interest rate and down payment) Down payment: Expect at least 5%, although some lenders offer zero-percent-down loans for well-qualified borrowers Time with commercial driver’s license (CDL): Varies, but an owner who does not have a CDL will be considered a high-risk borrower Age of truck: Less than 10 years Truck mileage: Fewer than 700,000 miles 2. Gather Documents The documents required by each lender will vary. However, having all of these documents ready to send to the lender will expedite the borrowing process: Documents showing your business is registered Current and past bank statements (up to 12 months) Business tax returns (up to three years) Current year profit and loss statement for your business Current business balance sheet Any business licenses or required certifications Your CDL, if you have one United States Department of Transportation (USDOT) number Motor carrier number 3. Find the Right Vehicle Finding the right vehicle is not only critical for your needs, but it is critical to the lender. Lenders are looking to mitigate the risk involved with the potential vehicle financing. The older the vehicle, or the more miles it has, the higher the risk. To limit those risks, try to keep your search to trucks that meet the following criteria: Fewer than 700,000 miles Less than 10 years old Sold by a dealer (ideally, but not required) In addition, the maximum a lender will lend is what the vehicle is worth―unless you are securing a business line of credit to purchase vehicles. Lenders usually won’t lend the full purchase price so that the borrower will need a down payment of at least 5%. When shopping for a truck—especially a used one—try to get an estimated value so you know you’re getting a price that the lender will finance. You will also need the following information to give to the lender once you find a vehicle: Make, model, and year Mileage Condition report Photos of the vehicle Serial number 4. Find the Right Insurance Regardless of what type of vehicle you are financing, insurance will be required. With a semi-truck, which can cost as much as $200,000 new, financing companies will want to see that you have proper and sufficient insurance coverage. Improper or insufficient insurance could derail your business in the event of an accident. Most lenders won’t fund the loan until receiving proof of your insurance. Consult your insurance professional about finding the right coverage for your business. In general, you will need some or all of the following: Primary liability coverage Physical damage coverage, including electronic and in-cab devices Bobtail coverage and/or nontrucking liability coverage Cargo coverage to cover what you are hauling The cost of your insurance will vary depending on your driving record and prior claims on your business. Insurance rates are also based on the value of the vehicle and the contents being hauled. 5. Choose the Right Lender While there are many online lending companies that can finance a semi-truck, we have selected the five best. Each has slightly different qualifications for lending, so be sure to compare them and choose the one that makes the most sense for your business. Smarter Finance USA: Best for New Owners is excellent for new owners, thanks to a lower minimum required credit score and its low down payment requirement. With a credit score of at least 600 and at least 5% down, owners can finance a new vehicle for up to $100,000. While Smarter Finance USA will work with new owners, it prefers owners with previous driving experience and a current CDL. Balboa Capital: Best for Quick Approval has an easy online application and promises quick approval decisions. It offers flexible term lengths with fixed monthly payments. However, Balboa requires borrowers to have been in business for at least one year and have at least $100,000 in annual revenue. It also requires a decent FICO score but doesn’t specify what that score is. Wells Fargo: Best for Flexible Terms offers financing and refinancing of new and used trucks, with loan terms of 12 to 84 months. One advantage Wells Fargo has is flexible loan terms, including either fixed or floating interest rates, seasonal payment structures, term loans, operating leases, and even equipment lines of credit. Commercial Fleet Financing: Best for Lending Options In most cases, borrowers can get approved by  by filling out a one-page application. Credit approval can come in as soon as two hours, with funding in as little as 24 hours. Commercial Fleet Financing offers zero-money-down loans with flexible terms and incentives. Loans can be a standard length of 36 to 60 months or extend to up to nine years (108 months). Borrowers with credit scores below 640 are referred to its Fresh Start equipment finance division for potential financing. Commercial Fleet Financing will also review the vehicle to ensure it has a clean title and is in good working order. Bluevine: Best for Additional Funding Needs can provide funding above and beyond simple vehicle financing. It offers lines of credit that can help finance your entire business. Bluevine’s lines of credit are open to business owners with credit scores as low as 625, which can help pay for maintenance on vehicles and keep business cash flow solid while financing a major purchase. Semi-truck Financing Challenges When beginning the process of financing a semi-truck, there are some factors that can cause problems for business owners. Any conditions that could increase the risk for the potential lender will likely result in a higher interest rate and a larger down payment. It could even result in a denial from the lender. Here is a list of potential challenges a borrower may face when financing a semi-truck: Being a new business: If you have only been in business for a short time, lenders will be less likely to finance a large investment like a truck loan. New business owners may want to consider leasing a lower-risk, lower-cost option to build their business credit. Poor credit: If you have poor credit, the lender will see you as a high-risk borrower. If you are approved for the loan, it will likely be at a higher interest rate and a higher down payment than a well-qualified borrower. Buying your truck from a private party: Because vehicles purchased from a dealer will go through at least a basic inspection process, lenders will view a truck purchased from a dealer as a lower risk than one purchased from a private party or an auction. It will be harder for the lender to confirm the vehicle’s condition in a private sale, increasing the risk. Low cash reserves: Low cash reserves mean less money to use for a down payment, increasing the risk for the lender. Solid cash reserves signal to the lender that it will receive its payments on time, even if you have a slow week or two. A borrower with limited reserves is at a higher risk for late payments or even loan default. Additionally, it is important to maintain a cash reserve for maintenance and repair of your truck. Buying an old truck: A lender needs to find a comparable value before it lends on a used truck. This is difficult for trucks that are more than 10 years old. If a lender does lend on an older vehicle, it will likely require a larger down payment to reduce the risk. The lender will likely charge a much higher interest rate, which could approach rates for unsecured loans. Not having a CDL: Lenders view non-CDL borrowers as high-risk borrowers. If you don’t have a CDL, who is driving your truck? Likely, it means that someone will be driving it that doesn’t have a vested interest in the security of the vehicle. Bottom Line Financing a new or used truck is a significant investment for your business. This guide should help you prepare for all the steps needed to secure semi-truck financing. It is essential to shop around—when looking for a vehicle, a lender, and an insurance provider. You are financing a piece of equipment that costs as much as a new home in less than 24 hours. Do your homework, and you’ll get the best deal for your business when financing your next truck.