Are you in the transportation business? Are you looking to expand and grow your company? Or maybe you’re in need of some extra money to cover an unexpected expense. Whatever it is you need financing for, finding the right business loan can sometimes seem like an endless task, but it doesn’t need to.
A business loan can help you start any transportation business, including:
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No matter what type of transportation you supply, the costs of running any business, let alone a vehicle-based one, can be extremely high. All cars, vans and shuttles, particularly luxury models, require plenty of maintenance, repairs, fuel, and storage. As the owner of the company, you’ll likely also have to update your inventory on a regular basis. So, for all vehicle and business-related expenses, getting the right amount of financing should be one of your top priorities.
In order to legally run a transportation business, you’ll need to register your business and establish a 1-800/vanity number. You’ll also need to purchase the necessary, province-specific insurance policies such as comprehensive automobile insurance, commercial auto insurance business liability insurance, blanket fleet coverage, and more.
Whether you own a fleet of trucks, cars, limos or taxis, you’ll need to regularly maintain them and cover any costs due to vehicle mechanical failures. This includes vehicle diagnostics engine repairs, brake repairs, tire changes, oil changes, and other body or electrical maintenance or repairs.
Running a transportation company requires qualified drivers and chauffeurs with specialty licenses, in-house mechanics for repairs and maintenance, managers to handle administrative work, marketing experts to build awareness of your brand, logistics coordinators to plan and track shipments and more depending on the size, type, and complexity of your transportation business.
Learn how to set up payroll for your transportation company.
One of the biggest costs of owning a transportation company is vehicles. Whether you decide to buy or lease, the cost of obtaining the vehicle (regular/stretched limousines, town cars, shuttle buses, oversized vans, etc) will be hefty. Moreover, other equipment such as GPS and speed limiters will also require a good amount of capital.
If you plan on owning a fleet of trucks, taxis, limos, you’ll need sufficient area to park and store your vehicles. Leasing or building a sizable storage lot, warehouse or garage with a proper security fence/wall and rolling gate will be costly. You can also build or renovate your reception area to enhance your customer experience.
In order to regularly maintain your vehicles, you’ll need to have access to basic fluids such as wiper, brake, transmission, power steering, and more. As a transportation service, it’s important to also supply your vehicles with all roadside emergency supplies including road flares, first-aid kits, and more.
Learn how to manage your small business inventory.
| Amount | APR | Term (months) | ||
 | 1k-300k | Fee-Based: Starting at 9% | 12- 60 | Learn more |
 | 5k-300k | 8% – 29% | 6-18 | Learn more |
 | 1k-500k | +5.9% | 3-60 | Learn more |
 | Up to 300k | 8%-22% | 6-12 | Learn more |
 | 5k-500k | - | 6-18 | Learn more |
 | 100K + | 6.05% + | 60 | Learn more |
 | 5K-100k | 15%+ | 12-18 | Learn more |
The requirements to qualify for a business loan will vary depending on the lender you apply with. However, there are some common aspects you’ll be evaluated on, no matter who you choose.
There are many ways you can finance your transportation business in Canada. Depending on what you’re trying to finance, each financing option comes with its own benefits and drawbacks.
A merchant cash advance is an expensive but fast way to obtain a lump sum of cash. Unlike a business loan, there are no set terms, payments are made as a percentage of your card sales. This form of credit is great for emergencies such as vehicle repairs or replacements. It also is a good alternative to a business loan when you need to boost cash flow quickly.
As a transportation business, it may be a while before your client pays you, especially in commercial trucking. Clients are often slow to pay after receiving their shipments, which can make it difficult to pay your current outstanding bills. Instead of waiting for them, you can receive the cash now through invoice financing. Invoice financing involves selling your accounts receivables at a discount to a lender. In return, you’ll receive a lump sum of cash that you can use to pay bills or any other expense.
Equipment loans work just like a business loan, except the equipment you purchase is used as collateral to secure the loan. It’s also important to note, that lenders typically only finance up to 80% of the equipment price, meaning you’ll have to put down 20% out of your own pocket. This makes equipment financing easier to qualify for even if you have bad credit. Whether you need to finance a truck or a fleet of cars or limos, an equipment loan can help you make it a reality.
Check out how equipment financing can help you finance your truck.
If your transportation business is experiencing a shortage of cash flow due to a seasonal slowdown in business activity a business line of credit can bridge the gap. With it, you’ll have access to a certain amount of money that you can withdraw from whenever you need it. Interest is only paid on the amount used and you regain access to the funds as you pay it back. This form of credit is a great alternative to business loans for smaller business expenses.
The Government of Canada offers a number of financing programs and grants to help businesses grow. One of the most popular programs for small businesses is the Canadian Small Business Financing Program (CSBFP). The CSBFP is a government-backed loan that is issued by most major banks, credit unions, and financial institutions. You can borrow up to $1 million for your business, but only $350,000 for equipment and leasehold improvements.
When you’re trying to focus on the happiness of your clients and the condition of your vehicles, chances are you won’t have time for much else. With Loans Canada, applications are easily completed and processed quickly from any computer, laptop, or wireless device. We can match you with the right lender to help you grow your business.
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