Buying A Semi-truck If You Have Bad Credit
With a Mack semi-truck costing around $40,000 for a decent model
, it is natural to require some kind of funding in order to purchase the truck of your dream. Not everybody has rich parents to fund their son's new business, and as for rich uncles, you simply don't have one. Thus, the problem arises of how to begin your business, when the bank will not loan you a dime.
There are a few options in which you could employ to purchase your truck. However, the first question that one must consider is that, if you don't have the funds to purchase a truck, then are your funds too little to actually begin a business? It will come as no surprise that when beginning to build your business, you can't really start it without the capital to invest. Aside from that, one needs the funds to pay the other people joining you on your venture. It would be foolish to rely entirely on the profit, because new businesses often do not have a lot of profit. Thus, if you find yourself in such a predicament, first one could look at being employed by a company. This way you would be able to save the necessary money to buy your own trucks, invest, and pay your workers their deserved wages. The other advantage with such an approach is that you will be given a truck, albeit only for this job. However, this would be much more than you had before.
Nevertheless, if you are adamant that you wish to begin your business without any capital, then there are a few options to renting a semi-truck in order to begin acquiring work for your business.
The first option would be a co-signer. This would have to be somebody who trusts you entirely, and when you have bad credit already, this could be difficult to obtain. Especially if the people you are asking are not your family members. The idea of a co-signer is that the person who signs the document pertaining to the loan - along with you, promises to pay your debt if you fail to pay it. Unfortunately, there is considerable risk for the co-signer, as they themselves must have good credit, which could be affected if matters take an unexpected turn, especially the amount borrowed for a semi-truck. In addition, the chances of the co-signer seeing the money again, if they were to pay the debt for you, would be almost none, since you were unable to pay the debt back to the bank, or to the dealer. Usually such co-signing involves a family member, but this in itself could cause significant problems if things do not turn out well.
The second option is to locate a dealership that carry their own papers. These dealers will allow you to pay back the money on a monthly basis, without going through any banks. The advantage for them is that they sell more trucks, since contacting a bank is not a requirement. Credit checks will not usually be done, and the understanding is that you will pay a considerable portion of the money you have loaned back in interest. Often a dealership will insist that you live locally, so that if you were unable to make a monthly payment, then they could come knocking on your door, demanding the money, and if things got really bad, and you were unable to make any subsequent payments, or come to some kind of agreement with the dealership, then a debt collector would undoubtedly be called in to rectify the situation. Unfortunately, this usually involves them taking your items, such as your television, CD players, and other items that can be sold to cover the debt. If you don't have any items that they are willing to take - usually items that cannot be sold for a decent amount, then you may face bankruptcy, and obtaining any subsequent loans or other financing, would be almost impossible.
This leads us to the third choice, in that you can offer the dealer other collateral to back the loan. These could mean items like real estate, heavy equipment, or jewellery - anything worth a lot of money to cover the loan. If the debt is not paid back in the agreed time frame, then this collateral will be taken to cover the debt.
By talking to lots of dealers, you can usually overcome the burden of the bad credit. There will usually be one dealership, from the thousands you can speak to, who will offer you some kind of workaround for your bad credit. Once you have found such a dealer, the semi-truck of your choice will be much closer to becoming a reality!
by: Tim Scott
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