As we make our way back out of the recessions due to the COVID-19 pandemic there are 2 areas of the economy that need to be working well in order for us to get back to historic low unemployment. If you have read our article on “How the Housing Market can get us Back on Track,” You know our stance is that real estate is going to lead the way. Another very important aspect of our economy that has to be working in the transportation industry. Roughly 70% of all goods and services that are used in the US are transported by trucks. If America’s trucks were to remain idle for even just for a day, the consequences would be severe.
There are 3.5 million truck drivers in the United States according to the American Trucking Association; however, as baby boomers continue to retire the trucking industry is struggling to recruit enough drivers to meet demand. 5 years ago, there was a 10,000 truck driver shortage and today that number has ballooned to a shortage of 60,000 drivers. To meet the demand of truck drivers, we are going to need a combination of new technology and to be able to recruit both younger men and women.
Although a rise in demand is good for the trucking industries if supply cannot meet demand it can create issues for everyone. JaScott is committed to helping the trucking industry and professionals looking to own their own trucks to empower themselves by helping them obtain the financing they need to operate in this space.
Financing for the trucking industry can be complicated. A truck can cost anywhere between $90K and $200K, plus insurance and trailers are typically expensive as well. However, with the right team of experienced professionals on your side, we can greatly reduce the stress that comes along with financing by walking you through the process step by step to find the right lender and loan mix that will best fit your needs. In this article, we will go over the four loan types that we typically see clients in the transportation space use, and if you want to know more information on how to mix and match these loans read our article titled, “How to Pair Loans for the Best Results“.
First on the list is equipment financing, as it’s specifically engineered for expenses like a truck. Maximum loan amounts can reach in the millions, so it can definitely make it possible to buy that the top of the line Freight Truck to push your business forward. Equipment financing can allow you the flexibility to invest in your business without tying up all your cash in purchasing equipment, which in turn will allow you to grow your business faster.
Whether you need a truck, trailer, or new software for your office, term loans have the flexibility to get you there. With amounts ranging from $5,000 up to $2 million, you can sometimes receive your money in just a couple of days.
These loans are like term loans, but they are built even more for speed. These loans for funded by alternative lending sources they do not typically require as much paperwork as other sources, but they can have a higher interest rate or come with more points. You can get the money you need in 24 hours, and the term will be 1–3 years.
Small Business Administration (SBA) business loans are provided by banks, credit unions, and nonprofit financing institutions. They provide both lines of credit and traditional term loans to new and existing small businesses throughout the U.S.
SBA lenders don’t provide financing opportunities directly to the business owner. Instead, the bank will provide the loan, and the SBA covers a percentage of the financing. By doing this, the SBA hopes to improve small business lending practices while also mitigating risk to the lenders, making a “win-win” situation for everyone involved.
Line of Credit
If you need to make equipment purchases that have smaller price tags, consider a business line of credit. Rather than providing you with a lump sum worth millions of dollars, a line of credit gives you access to a set amount of money that you can dip into whenever necessary. And, like a credit card, you just pay for the specific amount that you use.
By researching all your options you will know what to expect when you start the process, but sometimes it can still be overwhelming. If you would like to speak with one of our consultants who can help walk you through the process, please reach out to us. We are more than willing to help. We all benefit from the success of an efficient trucking and transportation industry.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein.