Would you like to start a trucking business without putting down your own money?
Knowing that financing is the lifeblood of any trucking business, is this possible? You may wonder.
So, if you don't own them, you have to buy them.
And trucks are not cheap. The cost for a semi-truck starts at $80,000.
So, you may ask. How to start a transportation business with no money?
The answer is ...
These are options where you can borrow money for your initial startup capital.
Below, find a list of financial options to borrow capital to start a trucking company with no money.
How much does it cost to start a trucking company?
A commercial truck costs a lot of money but that is not the only expense of your business.
When going through the different steps of starting a trucking company, there are costs such as registrations and documentation, business permits and licenses, accounting, and software.
These costs can vary from business to business.
That's why it's difficult to give you a cost to start a trucking company that fits all.
Starting a trucking company with no money options
1. Commercial truck loans
A commercial loan may be your best financing option. Though, it comes with its own rules.
There are a few factors that need your attention.
First, to get a good interest rate commercial loan, you need a good credit history. Though, there is a chance to get a loan if you fix your bad credit.
Generally, banks want to see a couple of years of operating history before approving a loan.
While choosing a loan, try to understand the terms before committing to it.
Consider your monthly payment, the down payment, and every other detail.
Before you go through getting a loan process for your trucking business, consider having a plan to pay it off.
2. Consider renting
If you don't qualify for a commercial loan, consider renting the trucks and other company equipment.
This option decreases the entry level barrier into the trucking business. It cuts down the startup costs and allows you to operate sooner.
3. Lease to own
If you don't want to rent the vehicle, you may want to use the "lease to own" option.
In that case, the money that you put down for using the truck will go toward buying it.
Once the lease in full, the truck is yours.
4. Buy a used truck
If you have some funds but not enough to buy a new truck, consider acquiring a used truck.
This option cuts down on the initial payment for buying new trucks.
Make sure to buy a well-cared used truck because you don't want to pay more for its maintenance after buying it.
Consider asking an expert opinion about the truck.
5. SBA loans
SBA loans are popular due to their low-interest rates, high loan totals, and generous repayment terms.
Moreover, the SBA guarantees up to 85% of the loan’s total payment if the borrower can’t make repayments.
These types of loans are a great financing option for trucking companies or owner-operator start ups, but they are hard to get.
To get an SBA loan, you need a long and established credit history and a good credit score.
The easiest way to get money for your transportation business is to apply for grants.
Whether you apply for company grants or grants to buy a semi-truck, the process is the same.
How to get a grant?
Well, there is a procedure of steps to apply for grants.
Usually, every type of grant has their application procedure. You just have to find the grant and follow the application procedure of that grant. See this example application of government grants.
Below are a few available grants:
6. FedEx small business grant contest
FedEx Small Business Grant Contest allows entries from people with compelling stories.
Ten finalists have the chance to win up to $50,000 to start their businesses.
If you have a compelling story, give it a shot.
Prepare your story. Make it more appealing. And beat other entries to win the contest.
7. NASE growth grants
NASE grants (National Association for the Self-Employed) help small business owners of different types. To qualify for this grant, you need to become a member of NASE.
The issued grants can be up to $4,000. You can invest this money in your trucking company or into marketing it.
8. Veteran-owned business opportunities
Depending on their prior military service, veterans have access to grants from the veteran-owned business opportunities program.
The Department of Veterans Affairs has created a program where those who have served in the military can access funding to set up their businesses.
It essentially provides much-needed support to help veterans get access to financing.
9. The Amber grant
The Amber Grant is for women entrepreneurs.
So, any woman in trucking can apply for this grant.
This is for women entrepreneurs interested in starting their trucking companies.
Under this program, both new and existing entrepreneurs are qualified to apply.
To qualify, share your business idea. And explain how will you spend the prize after winning the contest.
10. Nav small business grant
Nav Small Business Grant is a small business grant accessible by entrepreneurs.
Your small business gets awarded a grant of $10,000, which is expected to be channeled into establishing your business.
First, sign up for an account. This entry requirement is followed by posting on your company Facebook page to tell your story.