Can I Start a Trucking Business with Bad Credit?


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Starting a trucking company is something that many people aspire for. After all, it seems to make more sense to own your own company and make all of the money, doesn’t it? But there are caveats to that dream and it can take quite a bit of money to get going.

But there are ways to get going on starting your trucking company even if you aren’t necessarily flush with funds. It will take some creativity and some planning, but it is possible to start a trucking company with little financing and be on your way to earning a steady, great income.

Before Getting Started

Ideally, this is not an idea you will have at the spur of the moment and pursue the same day. That is the quickest way to financial trouble and even if you do get your company off the ground, it is likely to come crashing down sooner rather than later.

You don’t need to start your trucking company right now. Sure, it would be great to own your own business and just get things going, but it might not be the best idea to launch right away. Taking time to plan and having the patience to wait for ideal conditions is always the best route.

To even begin your own company, you will need to have the answers to things such as lease purchases, seller financing, potential high-interest loans through a financing company, and financing through the company that you wind up leasing your truck through.

If you have bad credit and no money available to get started, the best course of action is to pump the breaks. You need a plan and you need to keep it simple. This is where having a one-year plan can be highly effective.

By having a one-year plan, you can make few commitments in the short-term and put all of your focus on those commitments. The good thing is that there will always be trucks available and the shipping and freight industry isn’t going anywhere. You have time.

You should also own your situation. Be honest about what your cash, credit, and debt situations are. Lying to yourself will only put you in an unfavorable position that could lead to more financial trouble down the road.

Your credit is where it is today because of the decisions that you have made in the past. Owning those mistakes and making a commitment to improving them is a good start. Not only that, knowing what your money and debt situation is allows you to make improvements in those areas.

The goal here is to put yourself in the best possible position when it comes to obtaining the financing that you need to turn your trucking company into a reality. By having patience and exercising careful thought and caution, you will find that you are much better prepared to take on the financial responsibilities that come with owning your own trucking company.

Find a Mentor If Possible

Owning your own company seems like a dream, but it also comes with a lot of headaches that far too many people don’t even consider. Having help along the way is completely acceptable and is actually preferable. This is to ensure that you don’t make the same mistakes that so many others do when trying to get a trucking company off the ground.

With a mentor in your corner, you can not only see what it is like to own a trucking company, but know what pitfalls to avoid. Someone with experience would be ideal, someone who can coach you through these situations and scenarios in an effective way.

Thankfully, there are a couple of places where you can find that mentor to help you through the setup of your company. Your personal life is the most ideal place to look. Go with someone that you not only know, but someone that you admire from a financial perspective.

When considering this person, think about where you want to be and who you would like to be most like in 5 to 10 years. It might hurt your pride, but it could wind up being one of the smartest and most financially beneficial moves that you make.

You can also check with a credit union or bank for that mentor. There are bankers out there who will be willing to sit down with you and come up with a reasonable plan for what you want your business to be like.

It would also be beneficial to see if they would be willing to follow-up for a few minutes every once in a while so that you can give updates on your progress. While you may not have the personal level of trust in a banker that you would in an individual, these are financial professionals. They have the experience that you need from a financial perspective to get you to the level that you need to be at.

Financing Options for Semi-Trucks

When you do come to the point that you are ready to begin moving forward with your trucking company, you will need the obvious: a truck. This is where things can get expensive, either for yourself or your lender.

Planning ahead gives you the ability to save some money, which could make your overall financial burden better in the long run. But it isn’t always possible to save a ton of money ahead of time, which leaves you with more questions than answers.

So, if you need financing options to obtain a truck, where do you look? Thankfully, there are a few options available. Keep in mind that one may be better for you than others and vice versa. It is all about finding what option suits your financial needs and the needs of your company going forward.

Commercial Truck Loans

If you haven’t planned far ahead and don’t have thousands of dollars ready to put toward a semi-truck, a loan may be the best option for financing. Each loan has its own rules and you need to be aware of each of these.

When it comes to comparing your loan options, there are a few things to consider. Keep the down payment, the monthly payment, and all the other details of that loan agreement. Always read the fine print so that you can be aware of all of the pertinent details.

Generally speaking, you’ll need a good credit rate and work history to qualify for a loan with a decent interest rate. It is possible to obtain a loan with bad credit, but you will not get favorable terms like you would with a positive credit score.

Also, keep this in mind: it is important to get the truck that you need to get your trucking business off the ground, but it isn’t worth putting yourself into an untenable financial situation. Know what you are getting into before making a commitment that you may come to regret.


There are trucking dealers that own their own papers and can offer lease-to-own options. This means that any money that you put toward that truck will ultimately go toward purchasing it. When you have paid the lease in full, you will take full ownership of the truck.

Doing a lease-to-own option may require a higher down payment, so just be aware of the terms. Also, know who is going to be in possession of the title while you are making payments. The last thing that you want to deal with is making payments on a truck only to find that you never owned it in the first place.

This can be an ideal option if you have a large down payment available and find a lease-to-own dealer that you can trust. This might be difficult to do, but it is worth potentially pursuing.

Renting Your Truck

Buying a truck and the equipment that you will need to effectively run your business can result in high costs in a short amount of time. If you don’t have a ton of capital available in the short-term, renting can be a good way to combat those rising costs.

This is an especially reasonable option if you need to start your trucking company in short order. Using an equipment lender could be what you need to get going without having to invest a lot of money up front. So, instead of having to pay a rather large sum of money up front, you will be able to pay for the equipment bit by bit.

Renting is also a generally easier way to get your equipment than having to apply for financing through a financial institution. Generally speaking, banks will want to see at least the last couple of years of operating history before they will be willing to approve a loan.

Renting also means that you do not own your equipment. That means that you will be subject to rental guidelines and stipulations and you will be responsible if the equipment is damaged or destroyed. That can lead to a whole slew of costs that you may not have considered.

Buy Used Trucks

Buying new is ideal because you know that you are getting a truck with no negative history and the backing of the manufacturer or dealer. But buying new also means that you pay more money both up front and over the long-term.

This is where opting for used equipment can be much more beneficial. If you have a little bit of money available, consider buying a used truck over a new one. Obviously, you won’t want to buy a used truck that has had multiple issues or a negative history.

While it is possible to get a used truck at a cost you can manage, you will have to do your homework. Know the history of the truck that you are buying so that you can avoid the trucks that have been nothing but a problem.

Buying used will cost you a lot less and allow you to get your trucking company up and running in shorter order. But keep in mind another major caveat: buying used means you will likely get less life out of your truck than you would with a new one.

This may be a reasonable trade-off to make if you need to get your trucking company up and running and don’t have access to the funds that you need to get a brand new truck.

Financing with No Money up Front

There is no sugarcoating this: It may not be possible to obtain financing that you need with bad credit and no money down. That is not to say that it is impossible, but you will likely be limited to a handful of lenders and will be facing some of the highest interest rates out there.

Even better, there are some companies out there that specialize in financing truck loans. Do your research as you would before purchasing a truck. Know what your options are so that you can find the best possible fit for your business.

In an ideal situation, you would have some money to be able to put down up front or have great credit so that you can get the best possible rates. Unfortunately, that is not the case for everyone.

Another tip: If and when you manage to find a financier, hold on to them. You never know when you may need additional funding for your business – whether it is to expand or replace current trucks or equipment. You may also need funding for things such as hiring staff, vehicle repairs, and general expenses. Hold on to your financier for these occasions.

Like any other contract that you will agree to, make sure that you read the fine print first. Understand all of the details that entail a loan before you sign anything. The last thing that you want is to sign an unfavorable agreement and wind up having to pay off a loan that doesn’t help you as much as it should.

Opening up Your Business

There are a few things that you will need to do to set up your business. Funding is certainly an important step, but it is far from the only one. Here are a few things to keep in mind when getting your business started.


The most important thing that you will need, aside from the truck, is a Commercial Driver’s License or CDL. This is the kind of license that you will need to operate a vehicle or vehicles for commercial purposes.

There are different requirements that you will need for obtaining a CDL based on the state that you are in. Generally speaking, however, you will need to pass both a written and physical driving test to get your CDL.

Also, keep in mind that you will need your medical certification, driving history, passing the aforementioned tests, and the money to cover the necessary fees. Be prepared for these things before you walk in to take your test.

Do All the Paperwork

Much like obtaining your CDL, there are forms that you will need to complete before you can hope to begin your trucking business. You will need to register your company as a Limited Liability Company (also known as an LLC) to protect your personal assets from business liabilities.

You will also have to register your business with various entities in your state. Do your homework and understand what you need to obtain before you can open your business. Failing to do so may hinder your business or prevent it from being recognized as a legal entity.

Business Insurance

As you will learn when trying to start a trucking company, there are far more things involved in operating a business than simply owning a truck. Among the other steps that you will need to take is securing insurance for your business.

Because of the nature of owning a business, there are liabilities and dangers that you have to protect your business against. Having the right insurance means protecting yourself and your business. Adequate business insurance will cover things such as cargo, liability insurance, and worker’s comp, among other things.

Do your research on the various insurance companies that offer business insurance. Make sure that you find one that not only covers your needs, but will process your claims and pay them out in a timely manner. There is nothing worse than filing a claim only to have to wait for an extended period for it to be paid.

There are many things that need to be considered before starting a trucking business and you want to be certain that you have all of your bases covered. From buying a truck to insuring the business, it takes careful thought and planning to properly get your business off the ground. It is a dream for many of us to own our own business, but there are more things to it than you may have realized.

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