Lending and Finance
BLF Has Helped Our Truckers Receive Over
In Business Funding.
SBA Loans
Backed by the government, SBA Loans offer favorable terms to help small businesses thrive. A reliable route to secure funding, they provide stability and growth potential.
Learn more about SBA
Equipment Finance
Invest in your fleet without the upfront costs. Equipment Finance solutions make it easier to acquire, upgrade, or replace what you need to be on the road.
Learn more and apply
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SBA Loans are the backbone of government assisted financing for small business owners.
The Small Business Administration’s (SBA) 7(a) loan program is the most common and widely used government backed finance option.
These loans aren’t new. The big difference between an SBA loan and a conventional loan is that the government partially guarantees an SBA loan. While lenders provide the funds on an SBA loan, the agency guarantees a portion of that amount. If you default on the loan, the SBA pays out the guaranteed amount. This allows for longer payment terms and lower monthly payments.
Truckers that have been in business for longer than two years.
Interest-3.75+Prime
Amount-up to $5 million
Length- 10 years
1. Long-term working capital
2. Financing equipment
3. Refinancing debt
4. Payroll
5. Business expansion
1. Must Be a ‘for profit’ considered a small business, as defined by SBA
2. Have a FICO score over 650
3. Have reasonable invested equity (for loans over $300k)
4. Be able to demonstrate a need for a loan
5. Use the funds for a sound business purpose
6. Not be delinquent on any existing debt obligations to the U.S. government
The SBA 7(a) loan program offers variable interest rates. This means that the interest rate can vary over time.
All SBA interest rates are tied to the ‘Prime Rate’. The Prime rate is the rate at which the Federal Reserve lends to institutional lenders. This rate fluctuates based on several factors, most commonly the state of the current U.S. economy.
You may have recently heard of changes (increases actually) in the prime rate referred to as a “federal rate hike”. This is because President Biden requested the “Fed” (aka the Federal Reserve) to raise the prime rate. This is a frequently used tool to combat inflation, as higher rates typically slow down consumer spending, which should result in an overall decline in the cost of goods and services.
In a nutshell-
Currently the Prime rate sits at 7%.
SBA loans are
2.25%+ prime for 7 year loans = 9.25%
2.75%+ prime for 10 year loans= 9.75%
No one can be certain of just how long our economy will take to bounce back to health. The global marketplace is still recovering from the financial aftermath of Covid (and its brutal affects on supply chains) and the U.S. government can only do so much to lesson the effect of economic disruptions beyond its control. But sooner or later the economy will improve (they always do). And when this happens, the prime rate will be reduced, and the variable rate of your SBA loan will be adjusted to a lower level.
We will help you to gather and prepare all the documents that are needed once we begin working on your file.
Although the requirements will vary based on the individual lender and the type of SBA 7(a) loan, here is some of the documentation you may need to provide (note-this is not a necessary step right now):
1. SBA Form 1919, Borrower Information Form.
2. Personal background & financial statement (SBA Forms 912 /413).
3. Business financial statements, such as balance sheets, profit and loss statements and projected financial statements.
4. Business certificate or license
5. Loan application history
6. Income tax returns
7. Business plan
8. Business overview and history
Pros
1. More credit flexibility than some bank loans
2. Long repayment terms
3. Wide range of loan amounts
4. Low interest rates
5. Continued support
6. Multiple SBA loans are easy to get if you have a good payment history
Cons
1. Less competitive rates and terms than some banks (esp if credit score is 700+)
2. Lengthy approval times
3. Possible down payment required
SBA loans are not applied for directly at the SBA. Instead, they are applied for at SBA approved lenders. And it is far from an easy process, as there are literally hundreds of approved SBA lenders, each with their own specific requirements and areas of focus.
To apply for a 7(a) loan, you’ll need to work with an SBA lending partner (like us) to complete an application. Your lending partner will be experienced in knowing which SBA approved lender is the best fit for your business profile, your specific industry, the ins-and-outs of your operations as well as the strengths and/weaknesses in your application.
Because our entire practice is focused on trucking, BLF is capable of providing expert guidance in mitigating the SBA application process as it pertains to truckers.
To get started, complete the application on the left side of this box. This will give us all of the information we need to get started for you.
The SBA loan process can take several weeks. Sometimes it is a good idea to have a back up plan in case the application is ultimately declined. We usually recommend securing approval with another lending product while our clients are waiting on SBA decisions. This prevents applicants with running into trouble if they were depending on the SBA loan for a specific problem or necessary expense.
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Lines of Credit (LOC)-Access to funds when and if they are needed.
A line of credit (LOC) is a revolving loan that allows access to a fixed amount of capital that can be drawn upon whenever the need arises. Access to additional capital is dependent upon how much is paid back towards the original draw down.
As mentioned above, your payment, and the interest, is based upon the funds you use. Once repaid, the credit limit is available to be accessed again as needed. The repayment schedule is either weekly, or monthly, depending on the lender. Continuing to pay your LOC with regular on-time payments will usually result in your lender increasing your total available credit limit.
Ready access to capital at any time for any use. **Every trucker should always have at least 1 line of credit.
Unsecured LOC
Unsecured business lines of credits don’t require collateral, but some lenders may still require a personal guarantee (usually the case if the applicant has less than stellar credit)
Secured LOC
A secured business line of credit requires you to put up assets such as inventory or property as collateral. If you fail to pay back the credit line, a lender could seize your assets. While not as common as unsecured LOCs, these can be useful if access to very large credit lines are needed for the business.
Business Credit Card
Business credit cards are technically lines of credit, but they differ from traditional business lines of credit in several ways.
A business line of credit can provide a higher credit limit, may be secured by collateral and provides actual cash in your bank account when you make a draw. You can get cash with a business credit card, but you’ll be charged fees (usually called a cash advance fee) and a higher APR to do so.
Business credit cards, however, can provide rewards or cash back for spending — which is not something offered by traditional lines of credit. Rewards are typically related to business expenses, such as office supplies, gas, internet and cable. They may also offer 0% interest promotions, which allow you to pay no interest on your balance for a specific time period after signing up for the card.
Business credit cards work best for smaller ongoing expenses and for newer businesses without established finances, while business lines of credit work best for larger ongoing expenses and more mature businesses.
Fuel Cards
Many truckers take advantage of fuel cards, which are really credit cards that are designed for use for fuel only (and usually also tied to specific fuel brands). These cards often come with discounts and incentives based upon how often they are used and the payment history of the card holder.
Interest 6-22%
Amounts between $10,000-$1M
Revolving
1. Inventory expenses
2. Fuel expenses
3. Non-predetermined expenses (ex. emergency truck repairs)
4. Temporary but predictable cash shortages
6. As a substitute to factoring
While there is no “one size fits all” way to determine eligibility for Lines of Credit, the most common eligibility requirements are:
1. Personal credit of 630 or higher
2. Minimum annual revenue of $25k
3. At least 6 months with business operations (and revenues)
Most lenders calculate interest based the term of one year and display it as a percentage. From there, the revolving line of credit interest formula is the principal balance multiplied by the interest rate, multiplied by the number of days in a given month
1. Driver’s license
2. 12 months bank statements
3. Last year tax returns
4. Articles of Inc
5. Recent credit reports – personal and business
6. Proof of collateral (when/if required)
Pros
1. Ready access to capital at any time you need it
2. Cash flow source during slow seasons
3. Pay on only what you borrow
4. Credit line replenishes as you make payments
5. Take advantage of opportunities as they arise
6. Great way to build business credit
Cons
1. Higher interest rates than term loans (if you opt to not pay off your balance)
2. Limits may start out on the low side, (although they will increase as you go)
3. (Usually) need a minimum of two years in business
Most lines of credit can be applied in person at a local bank or through an online lender, with online lenders being far more available than local options.
The application process will vary from one institution or another, but for the most part it is very similar wherever you go. However, knowing where to go is the key to LOC financing. Most LOC lenders then to have their own “wheelhouse” of preferred clients.
BLF’s network of LOC lenders is vast. And because we specialize in truckers, we avoid the delay (and denials) many people encounter who go it alone. Our LOC partners are all trucker-centric, which results in more approvals, a speedier process and the maximum rate and terms.
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Term Loans are a viable SBA alternative. Oftentimes, they may even be the better option.
Bank Term loans are term loans meant to be repaid in a shorter amount of time than the 10-year term of a typical SBA loan. This type of loan can be a great way to get the funds you need to successfully build or maintain your business until you are eligible for an SBA loan
A Bank Term loan is a specific term (3-7 years), fixed-rate loan with stable monthly payments. These loans are a great fit when you need funds quickly and want to lock in your interest rate.
Any business expense that will be necessary to fund within the next 30 days.
Unsecured LOC
Unsecured business lines of credits don’t require collateral, but some lenders may still require a personal guarantee (usually the case if the applicant has less than stellar credit)
Secured LOC
A secured business line of credit requires you to put up assets such as inventory or property as collateral. If you fail to pay back the credit line, a lender could seize your assets. While not as common as unsecured LOCs, these can be useful if access to very large credit lines are needed for the business.
Business Credit Card
Business credit cards are technically lines of credit, but they differ from traditional business lines of credit in several ways.
A business line of credit can provide a higher credit limit, may be secured by collateral and provides actual cash in your bank account when you make a draw. You can get cash with a business credit card, but you’ll be charged fees (usually called a cash advance fee) and a higher APR to do so.
Business credit cards, however, can provide rewards or cash back for spending — which is not something offered by traditional lines of credit. Rewards are typically related to business expenses, such as office supplies, gas, internet and cable. They may also offer 0% interest promotions, which allow you to pay no interest on your balance for a specific time period after signing up for the card.
Business credit cards work best for smaller ongoing expenses and for newer businesses without established finances, while business lines of credit work best for larger ongoing expenses and more mature businesses.
Fuel Cards
Many truckers take advantage of fuel cards, which are really credit cards that are designed for use for fuel only (and usually also tied to specific fuel brands). These cards often come with discounts and incentives based upon how often they are used and the payment history of the card holder.
Interest-7 -18%
Amount-up to $15 million
Length- 2-7 years
1. Working capital
2. Equipment purchases and payments
3. Tax liabilities
4. Long term debt obligations
5. Fleet/Office expansion
6. Debt consolidation
Bank term loan eligibility is a ‘blend’ of several factors. A strength in one area can make up for a weakness in another, and vice-versa. The most common items that are taken into consideration are:
1. Personal credit above 650
2. Business credit (aka D&B Paydex) between 80-100
3. Minimum time in business of two years
4. Debt-to-income ratio at or below 43%
5. Positive business cash flow
6. Debt-service coverage ratio above 1
7. A strong and detailed business plan/use of capital
Simple Interest Rate
If you take out a $300,000 loan from the bank and the loan agreement stipulates that the interest rate on the loan is 4% simple interest, this means that you will have to pay the bank the original loan amount of $300,000 + (4% x $300,000) = $300,000 + $12,000 = $312,000.
Compound Interest Rate
Some lenders prefer the compound interest method, which means that the borrower pays even more in interest. Compound interest, also called ‘interest on interest’ s applied both to the principal and also to the accumulated interest made during previous periods. The bank assumes that at the end of the first year the borrower owes the principal plus interest for that year. The bank also assumes that at the end of the second year, the borrower owes the principal plus the interest for the first year plus the interest on interest for the first year.
BLF will help you to gather and prepare all the documents that are needed once we begin working on your file. This is important to note because we’ll need to look at loan placement first, before any document determination is made.
The documentation required will not just vary from one lender to another, also from one type (length) to another. Longer terms will tend to have more required docs, while some short terms actually require just 1 or 2 items from the borrower. Below is a list of some or all you may need to provide:
1. Loan application
2. Income tax returns
3. 12 months bank statements
4. Business overview and history
5. Business certificate or license
1. Often the lowest rates available
2. Faster approval than SBA
3. Lower cost to borrow (closing costs, fees, etc)
4. Little to no early payoff penalties
Cons
1. The best lenders have tougher approval requirements (credit, time in business, financials)
2. Not useful for ongoing expenses (vs LOC)
3. Will take longer than LOC to approve
It seems easy enough-one applies for a bank loan at a bank. And, of course, this is exactly right. But which bank?
The most seemingly logical place to apply for a bank loan might be the bank your trucking company already uses and has a relationship with. Indeed this was usually the best approach, for decades (and sometimes still is).
However, because one’s current bank will generally have a very specific list of approval guidelines, much smaller variation in loan products and, most importantly, little to no flexibility when it comes to creating a loan that is “outside the box”, there is little reason for loyalty. This is especially the case for local and small community banks (which many truckers love), who have far fewer options than almost everybody else.
Due to the advent of technology, borrowers are now able to take advantage of the immense competition between financial institutions and the endless variations between their products. And truckers, because of the typical inconsistencies in their business, especially need this sort of flexibility more than most other businesses.
BLF has relationships with over 60 banks across the country, including traditional brick and mortar powerhouses like Chase, and Wells Fargo., as well as lenders that are completely online, and even those that focus on unique (boutique) lending instruments. Truckers need the exact fit which is right for them, and we’ll know where exactly where to find it.
To get started, complete the application on the left side of this box. This will give us all of the information we need to get started for you.
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Equipment Financing-when it’s time to expand/upgrade the fleet.
Before or during a new/used truck purchase transaction truckers will often be presented with finance offers directly from the dealer. But in-house financing is a huge money maker for dealerships. And since every dealer sells equipment through only one finance company (often its own), the buyer will be robbed of options, and- more importantly, will be at the mercy of the dealer to be honest and forthcoming.
There are many finance options out there. And It is always best to find the best match for your needs and the particulars of your business. Often, after a good payment history is established, truckers can receive ‘fast-track’ financing for future purchases.
As an alternative to dealer financing and for private sale transactions
Interest- 8% -22%
Amount-up to $185k (per vehicle)
Length- 3, 5, or 6 years
1. Purchasing new equipment through a dealership (not always)
2. Purchasing used equipment through a dealership
3. Purchasing used equipment through a private seller
4. Getting out of a lease
5. Determining the best options before expansion
1. Minimum credit of 620
2. Medium-strong business financials
3. Time in business is often considered (1 year minimum)
The cost of an equipment loan depends heavily on the equipment you’re buying as well as your creditworthiness as a business, among other factors. The price of the equipment is directly related to the amount you’ll borrow for the loan, and the interest gets calculated by that principal loan amount. Almost all equipment finance rates are simple interest.
The most commonly requested documents are:
1. Most recent year business tax returns
2. Last 6- 12 months business bank statements
3. Equipment Invoice
6. Equipment Condition Report (for used equipment)
7. Completed Application
Pros
1. Owning equipment adds equity to your business
2. Tax benefits (depreciation on equipment)
3. Great rates are available for equipment financing for borrowers with A+ credit
4. Good payment history makes additional equipment easier to qualify for
4. Equipment financed for trucking almost always pays for itself, and can be calculated in advance to make sound decisions
5. Will help to build business credit
Cons
1. Down payment is sometimes required
2. Higher insurance costs for brand new equipment (sometimes)
3. Lower credit score applicants (sub 530) are often declined or will pay higher interest or finance charges
To the left of this box (or below the box if you are on a mobile device) you will find our Equipment Financing application. Please follow the instructions in the application to submit your information to us.
Once we receive your submission we’ll review the best options with you so that you can begin the process.
Equipment finance applications can be started even if a trucker has not 100% decided on the equipment, or if they have not yet found it for sale somewhere. Learn more about this here.
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Short Term Loans-the domain of emergencies or truckers with less than stellar credit.
Short term funding/capital is an option when either time is of the essence and/or a borrower does not meet the standard bank lending requirements. This is usually caused by low credit, short time in business, or inconsistent revenue.
Short term funding loans, more often than not, are a ‘one-off’. They are very unique to each borrower. But, because they are loosely regulated, borrowers can sometimes be misled by an unscrupulous funding broker/agent. It is important to have someone you can trust to put your needs first. Of course, BLF has your back.
Quick, emergency use capital, and/or access to cash when other options are not available.
Interest rates from 8-39%
Amounts between $5,000-$500,000
Terms 3-24 months
**Short term funding can be expensive and come with hidden fees. Be sure to contact BLF before you sign anything (even if you are not a client, we will guide you).
1. Sudden or unexpected expenses
2. To cover expenses while waiting on invoices
3. Consolidating high interest short term MCA
4. Fuel
5. Payroll / 1099 expenses
6. Unexpected tax bills
1. Minimum 6 months in business
2. Minimum credit-540
3. Minimum total monthly bank deposits should equal $6k+
A Merchant Cash Advance (MCA) is a type of business financing solution that provides quick cash to businesses in exchange for a percentage of their future credit card sales. The cost of this advance is typically represented using a “factor rate” rather than a traditional interest rate. Here’s a deeper dive into what a factor rate is and how it works:
Definition of Factor Rate: Instead of expressing the cost of borrowing in terms of an annual percentage rate (APR) like with traditional loans, MCAs use a factor rate. The factor rate is a decimal figure, usually ranging between 1.1 and 1.5.
Calculation: To determine the total amount you’ll need to repay, you multiply the amount of cash you’re advanced by the factor rate.
For example: If you receive a $10,000 advance with a factor rate of 1.3, you will need to repay:
$10,000 * 1.3 = $13,000
So, you’ll be paying back a total of $13,000 on your $10,000 advance.
Repayment: Unlike traditional loans with fixed monthly payments, MCAs are typically repaid daily or weekly. The repayment amount is based on a percentage of the business’s daily or weekly credit card sales. This percentage is called the “holdback rate”.
Difference from APR: It’s crucial to understand that factor rates can make MCA financing more expensive than traditional financing solutions. The reason for this is that factor rates don’t account for the time value of money. If you were to convert a factor rate to an APR, the effective interest rate can be much higher than what you might initially perceive.
For example, paying back $13,000 on a $10,000 advance over 6 months or a year can mean a very high effective APR, especially when compared to traditional business loans.
Typical Documents required for most short term loans are:
1. Last 3 months bank statements
2. (Sometimes) Recent tax return
3. (Sometimes) most recent factoring statement
4. (Sometimes) a recent credit report
Pros
1. Extremely fast funding
2. Simplified application process
3. Funding available to applicant’s with low personal credit scores
4. Business credit not usually a requirement
5. The ability to “renew” midway through the term (should be used with caution)
Cons
1. Expensive
2. Daily/weekly payments are not for everyone
3. Due to the relative ease of securing money, more discipline is needed to avoid the “cash advance merry-go-round” (taking on multiple loans at the same time)
4. Most cash advance brokers are liars.
6. Some cash advance lenders (the really bad ones) will freeze your bank account if you default.
Do not EVER apply for a short term loan online without speaking with BLF first. We cannot stress this enough.
Many short term lending companies should not be trusted to keep the applicant’s best interest in mind. EVER.
While the industry certainly has reputable companies and loan reps within it, there are tons of them that are not. We suggest always reaching out to us before agreeing to any short term capital contract (no matter how sweet the representative sounds!)
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Personal Loans-For truckers with no business track record.
A personal loan is a type of financing that, although it can be used for business purposes, is approved based upon the personal finances and credit score of the applicant. There is no restriction for the use of capital if approved for a personal loan-including using it for trucking operations.
Personal loans can be applied for at many places including one’s current bank, a credit union and some online lenders. The amounts of approval are based upon provable income (from either tax returns, pay stubs or both). Rates vary, and if the applicant has low credit they can be high.
Best For:
Startups with no business track record, or low revenue history.
Terms
Interest-8%-35%
Amount-Up to $100k
Length- Up to 24 months
Typical Uses
A personal loan can be used for anything.
How to Qualify
Usually through an application and a lender interview.
How Personal Loan Interest Rates are Calculated
It varies by lender. Some lenders will charge a lump sum, others a factor rate, and other still will use simple interest.
Required Documents
We will help you to gather and prepare all the documents that are needed once we begin working on your file.
The documents for a personal loan are usually a one page application, copies of w2 statements and 3-6 months of bank statements.
Pros and Cons
The pros of a personal loan are access to funds when all else fails.
The cons are they are usually expensive.
How to Apply
Personal loans can be applied for online. But BLF advises against ever doing this as there are many personal loan brokers who pose as personal loan lenders and it is hard to tell the difference.
If you need a personal loan, BLF has some fairly decent sources that are reputable and safe.
What is FAQ?
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Lending & Finance.
All of the loan options below use the same application at BLF, so if you are unsure if you qualify for one over another we can help you after reviewing your application.
SBA Loans
Backed by the government, SBA Loans offer favorable terms to help small businesses thrive. A reliable route to secure funding, they provide stability and growth potential. Read more…
Lines of Credit
Offering flexibility, a Business Line of Credit allows you to access funds whenever needed. It’s an ideal solution for managing cash flow and unexpected expenses. Read more…
Term Loans
A Term Loan is a specific term (3-7 years), fixed-rate loan with stable monthly payments. These loans are a great fit when you have a specific use, need funds quickly, and want to lock in your interest rate. Read more…
Equipment Finance
Invest in your fleet without the upfront costs. Equipment Finance solutions make it easier to acquire, upgrade, or replace what you need to be on the road. Read more…
Short Term Capital
Perfect for immediate needs, Short Term Capital provides quick funds. Whether it’s for bridging gaps or seizing opportunities, it’s a fast and efficient solution. Read more…
Personal Loans
Personal Loans can offer entry way into funding your new trucking business. They are also often used to fund ongoing business operations and expenses for truckers with little to no business credit. Read more…
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SBA Loans
The Small Business Administration’s (SBA) 7(a) loan program is the most common and widely used government backed finance option.
These loans aren’t new. The big difference between an SBA loan and a conventional loan is that the government partially guarantees an SBA loan. While lenders provide the funds on an SBA loan, the agency guarantees a portion of that amount. If you default on the loan, the SBA pays out the guaranteed amount. This allows for longer payment terms and lower monthly payments. Conventional business loan payment terms typically only last 5 years, but 10 years is the norm for an SBA 7(a).
Truckers that have been in business for longer than two years.
Interest-3.75+Prime
Amount-up to $5 million
Length- 10 years
1. Long-term working capital
2. Financing equipment
3. Refinancing debt
4. Payroll
5. Business expansion
1. Must Be a ‘for profit’ considered a small business, as defined by SBA
2. Have a FICO score over 650
3. Have reasonable invested equity (for loans over $300k)
4. Be able to demonstrate a need for a loan
5. Use the funds for a sound business purpose
6. Not be delinquent on any existing debt obligations to the U.S. government
The SBA 7(a) loan program offers variable interest rates. This means that the interest rate can vary over time.
All SBA interest rates are tied to the ‘Prime Rate’. The Prime rate is the rate at which the Federal Reserve lends to institutional lenders. This rate fluctuates based on several factors, most commonly the state of the current U.S. economy.
You may have recently heard of changes (increases actually) in the prime rate referred to as a “federal rate hike”. This is because President Biden requested the “Fed” (aka the Federal Reserve) to raise the prime rate. This is a frequently used tool to combat inflation, as higher rates typically slow down consumer spending, which should result in an overall decline in the cost of goods and services.
In a nutshell-
Currently the Prime rate sits at 7%.
SBA loans are
2.25%+ prime for 7 year loans = 9.25%
2.75%+ prime for 10 year loans= 9.75%
No one can be certain of just how long our economy will take to bounce back to health. The global marketplace is still recovering from the financial aftermath of Covid (and its brutal affects on supply chains) and the U.S. government can only do so much to lesson the effect of economic disruptions beyond its control. But sooner or later the economy will improve (they always do). And when this happens, the prime rate will be reduced, and the variable rate of your SBA loan will be adjusted to a lower level.
We will help you to gather and prepare all the documents that are needed once we begin working on your file.
Although the requirements will vary based on the individual lender and the type of SBA 7(a) loan, here is some of the documentation you may need to provide (note-this is not a necessary step right now):
1. SBA Form 1919, Borrower Information Form.
2. Personal background & financial statement (SBA Forms 912 /413).
3. Business financial statements, such as balance sheets, profit and loss statements and projected financial statements.
4. Business certificate or license
5. Loan application history
6. Income tax returns
7. Business plan
8. Business overview and history
Pros
1. More credit flexibility than some bank loans
2. Long repayment terms
3. Wide range of loan amounts
4. Low interest rates
5. Continued support
6. Multiple SBA loans are easy to get if you have a good payment history
Cons
1. Less competitive rates and terms than some banks (esp if credit score is 700+)
2. Lengthy approval times
3. Possible down payment required
SBA loans are not applied for directly at the SBA. Instead, they are applied for at SBA approved lenders. And it is far from an easy process, as there are literally hundreds of approved SBA lenders, each with their own specific requirements and areas of focus.
To apply for a 7(a) loan, you’ll need to work with an SBA lending partner (like us) to complete an application. Your lending partner will be experienced in knowing which SBA approved lender is the best fit for your business profile, your specific industry, the ins-and-outs of your operations as well as the strengths and/weaknesses in your application.
Because our entire practice is focused on trucking, BLF is capable of providing expert guidance in mitigating the SBA application process as it pertains to truckers.
To get started, complete the application on the left side of this box. This will give us all of the information we need to get started for you.
The SBA loan process can take several weeks. Sometimes it is a good idea to have a back up plan in case the application is ultimately declined. We usually recommend securing approval with another lending product while our clients are waiting on SBA decisions. This prevents applicants with running into trouble if they were depending on the SBA loan for a specific problem or necessary expense.
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Lines of Credit (LOC)
A line of credit (LOC) is a revolving loan that allows access to a fixed amount of capital that can be drawn upon whenever the need arises. Access to additional capital is dependent upon how much is paid back towards the original draw down.
As mentioned above, your payment, and the interest, is based upon the funds you use. Once repaid, the credit limit is available to be accessed again as needed. The repayment schedule is either weekly, or monthly, depending on the lender.
Ready access to capital at any time for any use. **Every trucker should always have at least 1 line of credit.
Unsecured LOC
Unsecured business lines of credits don’t require collateral, but some lenders may still require a personal guarantee (usually the case if the applicant has less than stellar credit)
Secured LOC
A secured business line of credit requires you to put up assets such as inventory or property as collateral. If you fail to pay back the credit line, a lender could seize your assets. While not as common as unsecured LOCs, these can be useful if access to very large credit lines are needed for the business.
Business Credit Card
Business credit cards are technically lines of credit, but they differ from traditional business lines of credit in several ways.
A business line of credit can provide a higher credit limit, may be secured by collateral and provides actual cash in your bank account when you make a draw. You can get cash with a business credit card, but you’ll be charged fees (usually called a cash advance fee) and a higher APR to do so.
Business credit cards, however, can provide rewards or cash back for spending — which is not something offered by traditional lines of credit. Rewards are typically related to business expenses, such as office supplies, gas, internet and cable. They may also offer 0% interest promotions, which allow you to pay no interest on your balance for a specific time period after signing up for the card.
Business credit cards work best for smaller ongoing expenses and for newer businesses without established finances, while business lines of credit work best for larger ongoing expenses and more mature businesses.
Fuel Cards
Many truckers take advantage of fuel cards, which are really credit cards that are designed for use for fuel only (and usually also tied to specific fuel brands). These cards often come with discounts and incentives based upon how often they are used and the payment history of the card holder.
Interest 6-22%
Amounts between $10,000-$1M
Revolving
1. Inventory expenses
2. Fuel expenses
3. Non-predetermined expenses (ex. emergency truck repairs)
4. Temporary but predictable cash shortages
6. As a substitute to factoring
While there is no “one size fits all” way to determine eligibility for Lines of Credit, the most common eligibility requirements are:
1. Personal credit of 630 or higher
2. Minimum annual revenue of $25k
3. At least 6 months with business operations (and revenues)
Most lenders calculate interest based the term of one year and display it as a percentage. From there, the revolving line of credit interest formula is the principal balance multiplied by the interest rate, multiplied by the number of days in a given month
1. Driver’s license
2. 12 months bank statements
3. Last year tax returns
4. Articles of Inc
5. Recent credit reports – personal and business
6. Proof of collateral (when/if required)
Pros
1. Ready access to capital at any time you need it
2. Cash flow source during slow seasons
3. Pay on only what you borrow
4. Credit line replenishes as you make payments
5. Take advantage of opportunities as they arise
6. Great way to build business credit
Cons
1. Higher interest rates than term loans (if you opt to not pay off your balance)
2. Limits may start out on the low side, (although they will increase as you go)
3. (Usually) need a minimum of two years in business
Most lines of credit can be applied in person at a local bank or through an online lender, with online lenders being far more available than local options.
The application process will vary from one institution or another, but for the most part it is very similar wherever you go. However, knowing where to go is the key to LOC financing. Most LOC lenders then to have their own “wheelhouse” of preferred clients.
BLF’s network of LOC lenders is vast. And because we specialize in truckers, we avoid the delay (and denials) many people encounter who go it alone. Our LOC partners are all trucker-centric, which results in more approvals, a speedier process and the maximum rate and terms.
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Term Loans
Bank Term loans are term loans meant to be repaid in a shorter amount of time than the 10-year term of a typical SBA loan. This type of loan can be a great way to get the funds you need to successfully build or maintain your business until you are eligible for an SBA loan.
A Bank Term loan is a specific term (3-7 years), fixed-rate loan with stable monthly payments. These loans are a great fit when you need funds quickly and want to lock in your interest rate. Additionally, paying off a Bank Term loan responsibly helps to build business credit
Funding for a specific need, usually within the next several weeks.
Interest-7 -18%
Amount-up to $15 million
Length- 2-7 years
1. Working capital
2. Equipment purchases and payments
3. Tax liabilities
4. Long term debt obligations
5. Fleet/Office expansion
6. Debt consolidation
Bank term loan eligibility is a ‘blend’ of several factors. A strength in one area can make up for a weakness in another, and vice-versa. The most common items that are taken into consideration are:
1. Personal credit above 650
2. Business credit (aka D&B Paydex) between 80-100
3. Minimum time in business of two years
4. Debt-to-income ratio at or below 43%
5. Positive business cash flow
6. Debt-service coverage ratio above 1
7. A strong and detailed business plan/use of capital
Simple Interest Rate
If you take out a $300,000 loan from the bank and the loan agreement stipulates that the interest rate on the loan is 4% simple interest, this means that you will have to pay the bank the original loan amount of $300,000 + (4% x $300,000) = $300,000 + $12,000 = $312,000.
Compound Interest Rate
Some lenders prefer the compound interest method, which means that the borrower pays even more in interest. Compound interest, also called ‘interest on interest’ s applied both to the principal and also to the accumulated interest made during previous periods. The bank assumes that at the end of the first year the borrower owes the principal plus interest for that year. The bank also assumes that at the end of the second year, the borrower owes the principal plus the interest for the first year plus the interest on interest for the first year.
BLF will help you to gather and prepare all the documents that are needed once we begin working on your file. This is important to note because we’ll need to look at loan placement first, before any document determination is made.
The documentation required will not just vary from one lender to another, also from one type (length) to another. Longer terms will tend to have more required docs, while some short terms actually require just 1 or 2 items from the borrower. Below is a list of some or all you may need to provide:
1. Loan application
2. Income tax returns
3. 12 months bank statements
4. Business overview and history
5. Business certificate or license
Pros
1. Often the lowest rates available
2. Faster approval than SBA
3. Lower cost to borrow (closing costs, fees, etc)
4. Little to no early payoff penalties
Cons
1. The best lenders have tougher approval requirements (credit, time in business, financials)
2. Not useful for ongoing expenses (vs LOC)
3. Will take longer than LOC to approve
It seems easy enough-one applies for a bank loan at a bank. And, of course, this is exactly right. But which bank?
The most seemingly logical place to apply for a bank loan might be the bank your trucking company already uses and has a relationship with. Indeed this was usually the best approach, for decades (and sometimes still is).
However, because one’s current bank will generally have a very specific list of approval guidelines, much smaller variation in loan products and, most importantly, little to no flexibility when it comes to creating a loan that is “outside the box”, there is little reason for loyalty. This is especially the case for local and small community banks (which many truckers love), who have far fewer options than almost everybody else.
Due to the advent of technology, borrowers are now able to take advantage of the immense competition between financial institutions and the endless variations between their products. And truckers, because of the typical inconsistencies in their business, especially need this sort of flexibility more than most other businesses.
BLF has relationships with over 60 banks across the country, including traditional brick and mortar powerhouses like Chase, and Wells Fargo., as well as lenders that are completely online, and even those that focus on unique (boutique) lending instruments. Truckers need the exact fit which is right for them, and we’ll know where exactly where to find it.
To get started, complete the application on the left side of this box. This will give us all of the information we need to get started for you.
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Equipment Financing
Before or during a new/used truck purchase transaction truckers will often be presented with finance offers directly from the dealer. But in-house financing is a huge money maker for dealerships. And since every dealer sells equipment through only one finance company (often its own), the buyer will be robbed of options, and- more importantly, will be at the mercy of the dealer to be honest and forthcoming.
There are many trucking finance options out there. And It is always best to find the best match for your current needs and the particulars of your business and its financial
As an alternative to dealer financing and for private sale transactions
Interest- 8% -22%
Amount-up to $185k (per vehicle)
Length- 3, 5, or 6 years
1. Purchasing new equipment through a dealership (not always)
2. Purchasing used equipment through a dealership
3. Purchasing used equipment through a private seller
4. Getting out of a lease
5. Determining the best options before expansion
1. Minimum credit of 620
2. Medium-strong business financials
3. Time in business is often considered (1 year minimum)
The cost of an equipment loan depends heavily on the equipment you’re buying as well as your creditworthiness as a business, among other factors. The price of the equipment is directly related to the amount you’ll borrow for the loan, and the interest gets calculated by that principal loan amount. Almost all equipment finance rates are simple interest.
The most commonly requested documents are:
1. Most recent year business tax returns
2. Last 6- 12 months business bank statements
3. Equipment Invoice
6. Equipment Condition Report (for used equipment)
7. Completed Application
Pros
1. Owning equipment adds equity to your business
2. Tax benefits (depreciation on equipment)
3. Great rates are available for equipment financing for borrowers with A+ credit
4. Good payment history makes additional equipment easier to qualify for
4. Equipment financed for trucking almost always pays for itself, and can be calculated in advance to make sound decisions
5. Will help to build business credit
Cons
1. Down payment is sometimes required
2. Higher insurance costs for brand new equipment (sometimes)
3. Lower credit score applicants (sub 530) are often declined or will pay higher interest or finance charges
To the left of this box (or below the box if you are on a mobile device) you will find our Equipment Financing application. Please follow the instructions in the application to submit your information to us.
Once we receive your submission we’ll review the best options with you so that you can begin the process.
Equipment finance applications can be started even if a trucker has not 100% decided on the equipment, or if they have not yet found it for sale somewhere. Learn more about this here.
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Short Term Loans
Short term funding/capital is an option when either time is of the essence and/or a borrower does not meet the standard bank lending requirements. This is usually caused by low credit, short time in business, or inconsistent revenue.
Short term funding loans, more often than not, are a ‘one-off’. They are very unique to each borrower. But, because they are loosely regulated, borrowers can sometimes be misled by an unscrupulous funding broker/agent. It is important to have someone you can trust to put your needs first. Of course, BLF has your back.
Quick, emergency use capital, and/or access to cash when other options are not available.
Interest rates from 8-39%
Amounts between $5,000-$500,000
Terms 3-24 months
**Short term funding can be expensive and come with hidden fees. Be sure to contact BLF before you sign anything (even if you are not a client, we will guide you).
1. Sudden or unexpected expenses
2. To cover expenses while waiting on invoices
3. Consolidating high interest short term MCA
4. Fuel
5. Payroll / 1099 expenses
6. Unexpected tax bills
1. Minimum 6 months in business
2. Minimum credit-540
3. Minimum total monthly bank deposits should equal $6k+
A Merchant Cash Advance (MCA) is a type of business financing solution that provides quick cash to businesses in exchange for a percentage of their future credit card sales. The cost of this advance is typically represented using a “factor rate” rather than a traditional interest rate. Here’s a deeper dive into what a factor rate is and how it works:
Definition of Factor Rate: Instead of expressing the cost of borrowing in terms of an annual percentage rate (APR) like with traditional loans, MCAs use a factor rate. The factor rate is a decimal figure, usually ranging between 1.1 and 1.5.
Calculation: To determine the total amount you’ll need to repay, you multiply the amount of cash you’re advanced by the factor rate.
For example: If you receive a $10,000 advance with a factor rate of 1.3, you will need to repay:
$10,000 * 1.3 = $13,000
So, you’ll be paying back a total of $13,000 on your $10,000 advance.
Repayment: Unlike traditional loans with fixed monthly payments, MCAs are typically repaid daily or weekly. The repayment amount is based on a percentage of the business’s daily or weekly credit card sales. This percentage is called the “holdback rate”.
Difference from APR: It’s crucial to understand that factor rates can make MCA financing more expensive than traditional financing solutions. The reason for this is that factor rates don’t account for the time value of money. If you were to convert a factor rate to an APR, the effective interest rate can be much higher than what you might initially perceive.
For example, paying back $13,000 on a $10,000 advance over 6 months or a year can mean a very high effective APR, especially when compared to traditional business loans.
Typical Documents required for most short term loans are:
1. Last 3 months bank statements
2. (Sometimes) Recent tax return
3. (Sometimes) most recent factoring statement
4. (Sometimes) a recent credit report
Pros
1. Extremely fast funding
2. Simplified application process
3. Funding available to applicant’s with low personal credit scores
4. Business credit not usually a requirement
5. The ability to “renew” midway through the term (should be used with caution)
Cons
1. Expensive
2. Daily/weekly payments are not for everyone
3. Due to the relative ease of securing money, more discipline is needed to avoid the “cash advance merry-go-round” (taking on multiple loans at the same time)
4. Most cash advance brokers are disgusting human beings.
Do not EVER apply for a short term loan online without speaking with BLF first. We cannot stress this enough.
Many short term lending companies should not be trusted to keep the applicant’s best interest in mind. EVER.
While the industry certainly has reputable companies and loan reps within it, there are tons of them that are not. We suggest always reaching out to us before agreeing to any short term capital contract (no matter how sweet the representative sounds!)
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Personal Loans
A personal loan is a type of financing that, although it can be used for business purposes, is approved based upon the personal finances and credit score of the applicant. There is no restriction for the use of capital if approved for a personal loan-including using it for trucking operations.
Personal loans can be applied for at many places including one’s current bank, a credit union and some online lenders. The amounts of approval are based upon provable income (from either tax returns, pay stubs or both). Rates vary, and if the applicant has low credit they can be high.
Funding for a specific need, usually within the next several weeks.
Interest-3.75 -8%
Amount-up to $5 million
Length- 10 years
A personal loan can be used for anything.
Usually through an application and a lender interview.
It varies by lender. Some lenders will charge a lump sum, others a factor rate, and other still will use simple interest.
We will help you to gather and prepare all the documents that are needed once we begin working on your file.
The documents for a personal loan are usually a one page application, copies of w2 statements and 3-6 months of bank statements.
The pros of a personal loan are access to funds when all else fails.
The cons are they are usually expensive.
Personal loans can be applied for online. But BLF advises against ever doing this as there are many personal loan brokers who pose as personal loan lenders and it is hard to tell the difference.
If you need a personal loan, BLF has some fairly decent sources tat re reputable and fair.