commercial truck financing

The Benefits of Financing over Paying Cash

There is no one-size-fits-all strategy in manning a business especially in terms of business expansion that may require purchasing equipment. Most businesses are now looking into financing as a fast and cost-efficient means to acquiring a commercial truck as compared to paying in cash. For one, this gives entrepreneurs leverage when it comes to cash outlay because you will not be making any upfront payments and can pay off the balance following a set schedule or monthly payments for an agreed period of time. You can check out our recommended commercial truck financing site options from banks, credit unions, freight invoice factoring companies, automakers, and other financial institutions.

There are also a number of variables to consider when deciding whether to pay in cash or opt for financing like interest rates, tax rates, gross profit, time frame for repayment, and budget. The availability and loan amount largely depend on your credit rating. If you have a high credit score, then you would predictably be offered the best financing terms available.

Below are the benefits or advantages of financing over paying cash:

  • Effective way to build credit. New credit evaluation tantamount to 10% of your credit score. If you are trying to build credit and also build rapport with lenders then commercial truck financing would be the best option rather than paying in cash which does not add points to credit building. More so, if you are able to maintain good credit reputation with your lender then future business or home financing would be readily available for you.
  • Get better financial mileage. You would be able to purchase thru financing a more expensive or high-quality commercial truck than you can actually afford with available cash. Going for an old or depreciated model could save you present cash expenses but would eventually cost you more in terms of repairs or reconstructions.
  • Spread costs for an extensive period of time. You will be able to manage your money better with financing payments that is spread for a specific period of time. Full cash payment for a commercial truck with limited available cash could limit funding for other business facilities or day-to-day business operations.
  • High approval rate. Most commercial truck or car financing plans are much easier to apply for as compared to any financial loans. If you don’t have the ready cash and would want to invest in a high-end commercial truck, then you can easily do so with variety of financing options available.
  • Get a fixed APR for your financing needs. Even though interest rates have high volatility rate, you need not worry as commercial truck financing has a fixed Annual Percentage Rate (APR) or total financing costs for the entire loan period.

Avoid a serious dent in your finances by opting for commercial truck financing that allows you more spending power. This is tricky though because you must know that financing is credit and it must be paid in the agreed terms or it can backfire. Make sure to shop around and compare APRs of banks or financial institutions that include total charges plus interests so you can come up with a sound financing decision that can benefit your business over the long haul.