Daimler Truck Financial Insights: 5 Things to Consider When Growing Your Trucking Business

When you’re ready to grow your trucking business and finance more truck equipment, potential lenders will naturally want more information, such as:

• What’s driving your business growth, and why do you need more equipment?
• Is it the same business that’s growing larger, or are you moving into new market segments?
• Are you doing more for existing customers, or have you landed new customers?

Our captive finance company, Daimler Truck Financial, suggests these five ideas to consider as you plan to grow your trucking business or equipment:

1. Think Long Term – Set up a Line of Credit for Your Truck Purchases

   Now may be the time to work with a commercial vehicle lender to set up a line of credit for equipment purchases. This can tell you how much financing your lender is willing to provide over the next 6 to 12 months. As a result, it’s easier to plan based on the growth of your business, while avoiding the risk of overextending.

2. Plan Trade Cycles for Your Trucking Equipment

   As part of your long-term plans, you’ll need to consider the trade cycles of your equipment. After all, you don’t want a long finance term if you need a short truck cycle.

   As you set up the term of your lease or loan, consider:

   • How many miles will your trucks run each year?
   • How many years will you run a new truck before you replace it?

   Perhaps a balloon payment program might work for you. You can match the balloon payment to the projected value of the truck when you anticipate trading out of it.

3. Upgrade your financial statements

   As your trucking business or amount of trucking equipment grows, your financial statements become even more important. Lenders typically look for a total of three years: two year-end financial statements and one interim statement. These can initially be company-prepared statements, but as you borrow more to grow, lenders will typically request third-party, CPA-prepared financial statements. And while cash-based statements may work for small businesses, you may eventually need to switch to accrual-based accounting methods.

4. Retain your earnings

   How a trucking company retains its earnings says a lot about the business and its owners. For example, do owners make consistent, reasonable withdrawals and distributions over time, or do all earnings get withdrawn as soon as they’re deposited? Lenders like Daimler Truck Financial consider themselves your partner; when they invest money into your business, they want to see you do the same. Larger, successful fleets keep money in their businesses to help them grow further and build nest eggs that guard against market downturns.

5. Consult with Financial Experts and Allies*

   Finally, reach out to the individuals and companies you work with to tell them about your plans. Ask for ideas and help. Create a group of allies who are experts in their fields and can offer guidance. For more than 45 years, Daimler Truck Financial has been helping qualified customers grow their heavy haul, dump, tow, pickup and delivery, and over-the-road fleets. In fact, financing trucks is all they do. Along with your local dealer, they can help you choose a smart, sustainable program that’s perfect for growing your business.

   Find a dealer near you to learn more about how Daimler Truck Financial can help make your future fleet a reality.

   Daimler Truck Financial, a business unit of Mercedes-Benz Financial Services USA LLC, provides a broad range of financial and insurance products and services for Daimler Trucks North America’s commercial vehicle brands, which include Freightliner, Western Star and Thomas Built Buses. For more than 45 years, the company has been a trusted partner in the industry, creating specialized finance solutions tailored to specific customer needs.

^*Daimler Truck Financial does not provide or endorse any tax advice, accounting advice or tax strategy to its dealers, customers or potential customers. Consult with your accountant or tax advisor for any accounting and tax implications for all finance and lease products.

© 2021 Daimler Truck Financial is a business unit of Mercedes-Benz Financial Services USA LLC.