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What is Alternative Lending?

Alternative lending refers to non-traditional financing options available to trucking companies and owner-operators outside the conventional banking system. Unlike traditional banks, alternative lenders offer a more diverse range of loan products and may have more flexible qualifying criteria, making them an attractive option for truckers who may not meet the stringent requirements of traditional banks.

Types of Alternative Lenders

1. Online Lenders

These lenders operate primarily online and offer various loan products, including short-term loans, lines of credit, and equipment financing. They are known for their quick application processes and fast funding times.

2. Merchant Cash Advance (MCA) Providers

Offer cash advances based on a trucking company’s future revenue sales/receivables. The trucking company receives an upfront sum of cash and repays it with a daily or weekly pre-set payment amount.

3. Factoring Companies

These companies provide advances based on the value of a trucker’s unpaid invoices, offering immediate working capital in exchange for a portion of the invoice amount.

4. (Some) Equipment Finance Lenders

Specialize in loans and leases specifically for purchasing trucks and other equipment necessary for trucking operations.

Benefits of Alternative Lending for Truckers

1. Easier Qualification

Alternative lenders often have less stringent credit and documentation requirements, making it easier for truckers with less-than-perfect credit or newer businesses to secure financing

2. Faster Approval and Funding

The application and approval process is typically faster with alternative lenders, which can be crucial for truckers needing immediate funds for operations or emergency repairs.

3. Flexible Terms

Many alternative lenders offer flexible repayment terms and customizable loan products to fit the unique needs of trucking companies.

4. Innovative Products

Alternative lenders are often more innovative, offering products like invoice factoring or revenue-based repayment plans that are particularly well-suited to the trucking industry’s cash flow patterns.

Considerations When Opting for Alternative Lending

Higher Costs:

Alternative lending can be more expensive than traditional bank financing. Interest rates may be higher to offset the increased risk that alternative lenders take on.

Reputation and Reliability:

It’s crucial to research and verify the credibility of the lender. Not all alternative lenders are created equal, and some may not offer the same level of service or transparency as traditional banks.

Loan Terms:

It’s essential to thoroughly understand the terms of the loan, including the interest rate, fees, repayment schedule, and any penalties for early repayment.

BLF has an extensive network of reputable alternative lenders. These are lenders who offer flexible financing solutions, quick approval processes, and understand the intricacies of trucking operations, ensuring you have the capital you need when you need it.

Speak to BLF about lending options for your trucking business.

BLF is here to assist you

Our goal is to provide you with expert help and guidance for you needs. Whether you need funding or business services for your trucking company, you are in reliable hands.

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