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Although trains, boats, and planes are essential for many shipping-based industries, commercial trucking is a more versatile and cost-effective way to carry large amounts of goods cross-country. In fact, of the estimated 700,000 trucks in Canada, 420,000 of them are used for commercial transportation.
Shipping companies aren’t the only ones that find trucks useful. Many businesses, entrepreneurs, and truckers looking to start their own operations could benefit from one or even a fleet of reliable trucks. The only problem is that buying multiple trucks can be very expensive. Luckily, there are several ways to finance a fleet of trucks in Canada.
Technically, any vehicle that’s used for work by a company or other organization qualifies as a fleet vehicle. Even farming equipment, motorcycles, and other heavy machines could be part of a business’s fleet, as long as they’re driveable or towable.
That said, the term also relates to the number of vehicles a particular organization has in their repertoire. So, when someone is speaking about a truck fleet, they’re likely referring to a group of trucks that’s owned or leased by some type of corporation.
While the purpose of a fleet vehicle can vary depending on the organization, if you are buying or leasing a truck that comes from a fleet, chances are it was used for:
Most trucks, whether new or used, can be very expensive, particularly if you’re buying/leasing more than one and you’re looking for top tier models. It will benefit you in the long run to take your time and search for the best possible deal on the most reliable truck(s) you can find.
When building a fleet, it’s also important to know how the trucking industry works, what kinds of trucks are right for your business and what short, medium and long term expenses can be involved with the financing and aftercare processes.
Don’t worry, there are a few steps you can take to get started buying or leasing trucks for your fleet, such as:
It’s a good idea to formulate a viable business strategy, so you can show it to whatever lenders or other entities you’re working with. Within your plan, don’t forget to include all the essential details, such as your:
Most financing sources are more inclined to approve clients for better loans or leasing deals when they have a good business plan to present, along with strong finances.
Next, figure out what types of trucks you need in your fleet and how you will cover their base costs. In both cases, there are a few factors to consider, such as:
If you’re planning to finance or lease your trucks, rather than purchase them privately, they might qualify as business equipment. So, you may need to apply for an equipment loan or leasing contract, both of which can be found through various sources and involve different initial costs, approval requirements, and payment plans.
A truck company is only as good as the people who run it. Not only should you have a good staff managing your trucks, but your fleet should also be made of drivers that can operate such large vehicles in all sorts of road conditions. When choosing drivers, you’ll have two options:
Check out our guide on business payroll taxes and deductions.
When starting any business, especially one that involves trucks, be realistic about the expenses you could encounter and consider more than just the price of the vehicles. Other short, medium, and long term truck fleet costs can include but aren’t restricted to:
If your business is expanding rapidly but you’re not seeing the revenue you hoped for, you might have trouble paying all your debts. In that case, utilizing a factoring company could be a great option.
Factoring companies cover the invoices your business accumulates when customers don’t pay on time, in exchange for a percentage of the revenue you make from them afterward. They do this by buying your accounts receivable at a partial discount.
Most tucks can be pricey, particularly for newer or multiple models. So, you may need to finance your trucks over time, in which case you’ll have two alternatives:
If you have the funds or are planning to get a loan from a financial institution to pay for a fleet truck, there are many factors that make ownership a better alternative than leasing.
Don’t know which truck to buy? Check out our review on Peterbilt and Volvo.
If you prefer to consistently exchange your fleet trucks for newer models, leasing them over the years may be actually better than buying them.
Luckily, there are several ways to finance an otherwise unaffordable fleet truck. Before you get started, be sure to research each option and compare offers in your area:
If you’re looking for a loan or lease to cover the cost of one or more fleet trucks, Loans Canada can help you find the best deal for your business. Call us today or check out our website for more information about truck fleet financing in your area.
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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