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SBA 7(a) Loans for Trucking and Transport Companies
SBA 7(a) loans can be an excellent way for trucking companies to source working capital, expand operations, or buy another business. Find out more.
- SBA 7(a) Loans for Trucking Firms: The Basics
- How SBA 7(a) Loans Can Help Trucking Firms
- Working Capital
- Buying a Competitor
- Refinancing Business Debt
- Expanding Your Trucking Company
- Case Study: Expanding a Logistics Firm in Arizona
- Large Trucking Firms Can Also Benefit From SBA 504 Loans
- Get Your Best Loan
- Related Questions
- Get Financing
The trucking industry is huge. While there may not be many household names apart from UPS, FedEx, and the likes, the industry includes approximately 1.2 million unique companies.
A huge proportion of these companies need access to capital at some point, and SBA 7(a) loans are a great choice for a variety of reasons. SBA loans for the logistics industry average around $110,000, and they have many potential uses.
SBA 7(a) Loans for Trucking Firms: The Basics
How SBA 7(a) Loans Can Help Trucking Firms
The trucking and transport industry can be tough for businesses who don’t have the funds they need. Fortunately, trucking entrepreneurs can use SBA 7(a) loans for purposes including:
Working Capital
Running a trucking company can get expensive— and you might not always know when you’e about to get hit with a big charge. From truck repairs, to accidents, and driver overtime, an SBA 7(a) loan can provide the money your firm needs to move forward.
Buying a Competitor
The trucking business can be extremely competitive, and in some situations, it could be in your best interest to purchase the competition; acquiring their routes/clients, trucks, and some, if not all, of their drivers.
Refinancing Business Debt
If you want to refinance SBA-eligible business debt to reduce interest rates or free up cash flow, an SBA 7(a) loan can be an effective way to do so. However, the SBA stipulates the debt must currently be offered to the borrower on unreasonable terms, and needs to have been used for business purposes, not personal expenses.
Expanding Your Trucking Company
If you want to expand to new routes, hire new truckers, or purchase new trucks, an SBA 7(a) loan could be a great way to do it.
Case Study: Expanding a Logistics Firm in Arizona
Bryan, a skilled logistics expert, founded Goodyear Haulers, a transport and trucking business in Goodyear, Arizona. Over the years, his business gained a reputation for its reliable and efficient services, catering to a diverse clientele that included manufacturers, retailers, and e-commerce companies.
As the demand for his company's services grew, Bryan realized that expanding his business was crucial to maintaining its competitive edge and meeting the increasing needs of his customers. He sought an SBA 7(a) loan to finance the expansion, which included purchasing new trucks, hiring additional drivers, and investing in a state-of-the-art logistics software system.
Bryan applied for an SBA 7(a) loan of $350,000, which he planned to use for his expansion plans. He prepared a thorough business plan, outlining his objectives, market research, and financial projections. This document played a crucial role in convincing lenders that Goodyear Haulers was a viable and profitable venture.
Bryan's impeccable credit history, coupled with his extensive experience in the transportation industry, made him an ideal candidate for an SBA 7(a) loan. Upon approval, Bryan was able to execute his expansion plans, taking Goodyear Haulers to new heights.
With the loan funds, Bryan purchased five new trucks, hired and trained six new drivers, and invested in cutting-edge logistics software to improve the efficiency of his operations. The expansion allowed Goodyear Haulers to extend its reach, serve a broader customer base, and further solidify its reputation as a trusted transport and trucking business in Arizona and beyond.
This is a fictional case study provided for illustrative purposes.
Large Trucking Firms Can Also Benefit From SBA 504 Loans
Most trucking companies will likely find that the SBA 7(a) loan is the best fit for their needs. However, for some of the largest “small” trucking businesses, especially those that want to purchase commercial real estate to build a new trucking hub, an SBA 504 loan could be the best choice. While SBA 504 loans can’t be used for working capital, they other benefits, such as lower interest rates, and a slightly larger maximum loan amount, at $5.5 million.
Get Your Best Loan
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Related Questions
What are the eligibility requirements for SBA 7(a) loans for trucking and transport companies?
The eligibility requirements for SBA 7(a) loans for trucking and transport companies are outlined by the Small Business Administration (SBA). Generally, the business must be a for-profit, small business, and the loan must be used for business purposes. Additionally, the business must meet the SBA's size standards, be able to demonstrate the ability to repay the loan, and have a sound business purpose. For more information, please see the SBA's SOP 50 10 5 Subpart B 7(a) Loan Eligibility.
What are the advantages of SBA 7(a) loans for trucking and transport companies?
SBA 7(a) loans can provide trucking and transport companies with a variety of advantages, including:
- Working capital: An SBA 7(a) loan can provide the money your firm needs to cover unexpected expenses, such as truck repairs, accidents, and driver overtime.
- Buying a competitor: An SBA 7(a) loan can help you purchase the competition, acquiring their routes/clients, trucks, and some, if not all, of their drivers.
- Refinancing business debt: An SBA 7(a) loan can be used to refinance SBA-eligible business debt to reduce interest rates or free up cash flow.
- Expanding your trucking company: An SBA 7(a) loan can be used to expand to new routes, hire new truckers, or purchase new trucks.
For more information on SBA 7(a) loans, click here.
What are the maximum loan amounts for SBA 7(a) loans for trucking and transport companies?
The maximum loan amount for SBA 7(a) loans for trucking and transport companies is $5 million. For larger trucking businesses, an SBA 504 loan could be the best choice, with a maximum loan amount of $5.5 million.
What are the repayment terms for SBA 7(a) loans for trucking and transport companies?
SBA 7(a) loans for trucking and transport companies typically have repayment terms of up to 25 years. The exact repayment terms depend on the loan amount, the use of the loan proceeds, and the borrower's creditworthiness. Generally, the maximum repayment term for working capital loans is 7 years, while the maximum repayment term for equipment and real estate loans is 25 years.
For more information, please refer to the Standard Repayment Terms for SBA Loans page on the SBA website.
What documents are required to apply for SBA 7(a) loans for trucking and transport companies?
To apply for an SBA 7(a) loan for trucking and transport companies, you will need to provide the following documents:
- Business tax returns for the past three years
- Personal tax returns for the past three years
- Business financial statements
- Personal financial statements
- Business license
- Business lease
- Business plan
- Personal guaranty
- Collateral
For more information, please visit SBA 7(a) Loans for Trucking and Transport Companies.
- SBA 7(a) Loans for Trucking Firms: The Basics
- How SBA 7(a) Loans Can Help Trucking Firms
- Working Capital
- Buying a Competitor
- Refinancing Business Debt
- Expanding Your Trucking Company
- Case Study: Expanding a Logistics Firm in Arizona
- Large Trucking Firms Can Also Benefit From SBA 504 Loans
- Get Your Best Loan
- Related Questions
- Get Financing