Trucks are an essential source of conveyance on American highways. It goes without saying that almost all commodities cross a stage where they have commuted in a truck. As per the American Trucking Association, the trucking industry saw an uprise of 72.5% for all the freight goods transported in the States in 2019.
Most people in the business would agree that having your own transportation business seems like a great idea at this point. However, whether you plan to start a transportation business with a fleet of trucks or boost up your business through a self-transportation facility, it will require a huge sum of money. In such instances, the best solution is to lease or loan your desired vehicle for your use.
Many banks and online lenders provide these facilities to their clients and help them with their business plans and future investments. With such a saturated market, we understand how difficult it can be to pick a bank that would suit you best.
Further, in this article, we will discuss U.S. Bank, its offerings, the eligibility criteria for commercial truck financing, their application process and interest rates for a better understanding.
About U.S. Bank
U.S. Bank is the 5th largest banking firm in the United States. Founded in 1863 in Cincinnati, Ohio, with headquarters currently based in Minnesota, the bank has helped thousands of startups with their initiative and business plans. U.S. Bank is proud to state that it has over 2,900 offices in 25 states of America and has helped communities and corporate social responsibilities through its platform.
What services does U.S. Bank offer?
Since U.S. Bank is one of the largest banks in the States, it offers an extensive range of services to cater to every need of its small business customers. The bank has almost everything under its platforms, such as deposit accounts, financial products, and other services. The personal account services that the bank offers are mentioned below
- Savings Account: There are 5 different types of savings accounts categorized by U.S. Bank to sit well with the needs of the person. However, the annual percentage yield (APY) is only 0.1% at any and every amount. Therefore, don't set high expectations for saving with U.S. Bank.
- Checking Account: The checking account is subcategorized into five different account titles. Each account type has a certain fee to open an account and an additional maintenance fee that cannot be waived. With U.S. Bank's extensive ATM network, you can find an ATM on every street. However, for withdrawal from any other network, a fee of $2.50 is deducted from your account.
- Money Market Account: It is an interest-bearing deposit account that requires a minimal fee of $25 to open your account. There are no recurring monthly fees on this account. The interest rates are not much different from the standard savings, and they vary depending on where you live.
- Certificate of Deposits (CDs): CDs are a good option for easily keeping aside some funds as their savings. The interest rate on such accounts is higher than any savings or money market account. However, if you wish to withdraw your money before the maturity date, a certain amount will be deducted as a penalty. There are 4 types of CDs offered by U.S. Bank. The APY varies based on your term period.
- Credit Cards: U.S. Bank has a wide range of credit cards such as cashback, travel and low-interest cards. They also offer secured cards and credit cards specifically for small businesses. Moreover, partner cards are offered to the residing U.S. bank customers.
Along with these basic offerings, there are some other financial products offered by U.S. Bank, such as:
- Car Financing
- Boat Financing
- RV Financing
- Commercial Truck Financing
- Personal Loans
- Business Loans
- Mortgage Refinance
- Home Equity Loans and Lines of Credit
- Self-Directed Trading
- Managed Investment Portfolios
- Financial Advisors
The specific industries that U.S. Bank focus on assisting are:
- Capital Equipment Group
- Technology Finance Group
- Government Leasing and Finance Group
- Small business equipment financing
“U.S. Bank offers a great opportunity for businesses that are just starting or have limited working capital as they require no down payment”
Who should apply for commercial truck financing through U.S. Bank?
U.S. Bank is a good option for businesses looking for commercial truck financing or any other sort of equipment financing as the platform offers up to 125% financing to those who require it. This means that you get 100% financial accommodation for your truck as well as an additional 25% to bear soft costs such as tax, freight, and installation. It is a great opportunity for businesses that are just starting or have limited working capital as they require no down payment.
As U.S. bank is a legit bank, it offers wealth management and various personal banking services to its clients. Moreover, the website is user-friendly and easy to navigate with helpful blogs to make deals with U.S. Bank easier. In order to cater to your commercial truck financing needs, the bank provides a financial advisor who works one-on-one to facilitate your requirements.
The bank tries to offer easy policies compared to other banks to ensure that they can fulfill the needs of their clients with ease. In terms of loans, there are multiple repayment terms, including monthly, quarterly and annually, so that they meet their clients' expectations and bring ease to their financing experience.
However, as per their policies, they do not accommodate bank liens and only finance new vehicles. So, if you are looking forward to saving some bucks by purchasing an older truck, you're the optimal solution for you.
Business owners who are looking for a loan of up to $500,000 can easily benefit from this platform. Further, if you wish to fund less than $150,000, you can expect a fast loan approval with minimum paperwork or documentation. Each financing term range varies from 24 months to 60 months, depending on your preferences.
What are the eligibility criteria of commercial truck financing through the bank?
Every bank or online lender that provides financing has a list of criteria that they need their clients to meet in order to further deal with them. These requirements ensure credibility, brand reputation and whether they would be able to pay off the loan they are signing for. The requirements for each financial institution vary as per their policies.
In regards to U.S. Bank, we are unable to provide the exact figures or details as they do not have much information on their website. However, there are some characteristics that financial institutions consider when making a decision regarding financing, and for your ease, we have them listed below:
- Credit Score: Similar to any other loan type, having a good credit score is a plus point when it comes to commercial truck financing. There are higher chances for businesses with a good credit score to receive approval sooner than those who don't. Any score below 600 is considered bad and poor and would most likely require a cosigner for approval.
- Time in Business: Every finance lender is skeptical about investing in a new business as they don't know the business potential. It is highly preferred that businesses in the industry for over 2 apply for commercial truck financing through these platforms as many institutions do not accommodate startups. Banks and online lenders find companies that are a corporation or have limited liability much safer and less risky.
- Collateral: Many financial institutes consider the vehicle's model, quality, and condition before funding it as it acts as collateral on a loan. A used truck should have 350,000 or 500,000 miles to be considered reliable for a loan in terms of commercial trucks. However, in the case of commercial truck financing through U.S. Bank, you do not need to worry about this factor as this bank funds new trucks to its clients.
As we mentioned earlier, the eligibility criteria of each financial institute vary as per their terms and conditions. Therefore, in order to get a better understanding of your eligibility for financing through U.S. Bank, it is recommended that you contact directly and get your inquiries resolved.
“U.S. Bank has a relatively simple and easy application process for its clients if they are looking forward to funding $250,000 or less”
How to apply for commercial truck financing with U.S. Bank?
U.S. Bank is not well-established online. It has a slightly outdated website that looks organized but does not have much information on it. The generation of today prefers to get things done online without much physical contact or exertion. With an outdated website, it is safe to say that the bank is missing out on a lot of business.
The available information on the site includes basic services that the bank provides to its customer without additional or desired details like the APYs, term periods, eligibility criteria etc. U.S. Bank has a relatively simple and easy application process for its clients if they are looking forward to funding $250,000 or less.
However, as there is no application online, the interested individuals are required to contact them via phone or email at email@example.com. Moreover, as it is a proper bank, you can always head out to their local branch and get started with your business.
If you wish to fund a larger amount than $250,000, then U.S. Bank has an extensive load of the paperwork ready for you. You would be required to keep all your relevant documents aligned because the chances are you will be required to submit them on demand.
Large-scale businesses with higher financing requirements are made to contact other subdivisions in U.S. Bank for further assistance. These divisions are categorized as:
- Capital Equipment Group
- Technology Finance Group
- Government Leasing and Finance Group
- Small business equipment financing
The terms and rates of truck financing
As U.S. Bank offers multiple financing services under their platform, the availability of specific types of financing varies depending on various factors. The industry you work in, your annual revenue and your credit score as some points that might affect your financing experience.
U.S. Bank does not provide a detailed overview of their financing rates and patterns and requires individuals to contact them for further information. Commercial truck financing falls under the category of equipment financing at U.S. Bank.
As the bank understands the need for financing and how it is important to keep the business growing, they provide their full help to their clients. A financial advisor is assigned to you who helps you through each and every step and ensures that together they find the perfect credit option for you.
For equipment financing, loans of up to $500,000 are provided to the clients for the betterment of their business. You would be required to sign a single contract for 125% financing of the truck you wish to purchase. There are flexible payment options available over a term range of 24 months to 60 months on a monthly, quarterly or annually basis.
There is no specified down payment or interest rate mentioned on their website for commercial truck financing or equipment financing of any sort. You can always contact them on their customer support number or email for further assistance on this matter.
The only downside of loaning with U.S. Bank is that it does not provide 100% financing of the truck if you wish to loan it. Typically, they offer 80% financing in these situations. However, if you wish for 100% financing, you can always opt for leasing through this financial institution.
In the case of leasing, you must decide before financing the truck if you want to keep it after the maturity date ends or not. If you wish to make it your asset under your name, you must opt for capital leases as these facilitate ownership. The structure for your monthly lease payment would be higher in such a condition.
However, if you fear that your truck might get outdated within the term, you can opt for operating leasing. This means you can expect lower monthly payments, and you get to return the truck after the lease expires.
“Ranked as one of the top 5 banks in the United States, they never compromise on customer satisfaction”
Customer service and user feedback of financing with U.S. Bank
U.S. Bank has been ranked as one of the top 5 banks in the United States. The reason behind their years of success is that they never compromise on customer satisfaction. Each employee at the bank is willing to assist the clients with a smile on their face.
The customer support offered by these representatives is fair as some employees lack a little knowledge of their services. As per the reviews on Better Business Bureau, the employees are well-behaved. However, the clients have faced problems with getting a relevant answer to their queries in a timely manner.
Over the years of experience and excellence in dealing with their clients and providing them with exceptional service, U.S. Bank was given an A+ rating by Better Business Bureau. However, recently, when the bank was found guilty of the violation of the Secrecy Act, the ranking fell to A-. To conclude, the bank has a great variety of services in the market for their clients, but they have faced a lot of disputes, fines and payments due to the lack of management.
Frequently asked questions
What is commercial truck financing?
Commercial truck financing is a kind of financing that caters to the equipment or vehicle needed in the trucking industry. Companies can fund commercial trucks through different banks such as U.S. Bank, or online lenders and save their cash flow for future investments.
This is a good opportunity for businesses that do not have enough working capital to make a huge investment or those who prefer to keep aside their work capital for future perspectives.
When should a business get a commercial truck?
A commercial loan is usually applied for when a business has been in standing for over 2 years or wants an upgraded vehicle for its fleet. However, it is essential that you consider the cost and responsibility of loaning or leasing a product and the monthly commitment.
What is the difference between capital and operating leases?
Capital lease and operating lease are two kinds of accounting methods many financial institutions follow. An operating lease is similar to renting. A borrower makes the payments through operational leases to keep the asset off the balance sheet.
At the same time, a capital lease (also referred to as a finance lease) is similar to taking a loan. By the end of the term, the asset is owned, and it stays on the balance sheet.
Should I loan or lease a commercial truck?
Leasing a commercial truck is like renting a truck. However, as per some leasing options, at the end of the term, you have the chance to pay the difference between the payments you have already made and the value of the truck and purchase it for your business. On the contrary, a loan allows you to have full ownership of the truck you were paying monthly fees for.
Business owners with low credit scores and no capital for a down payment should opt for filing a lease as a loan requires a down payment of 10% to 25%. Moreover, the lease is a good option if you have just entered the commercial trucking business and have no commitment towards it.
What should I avoid when financing a commercial truck?
One must be aware of some factors when financing a commercial truck. For instance:
- Cash upfront: The lender you chose should not demand any sort of payment or charges before the financing approval.
- No early payoff: There should be an option to clear the payment earlier if possible, without any prepayment penalties. There are various reasons for such a situation; for example, you do not need the truck anymore, or your business or truck has suffered an insurance loss.
- Double sales tax: If by the end of your leasing period you decide to purchase the truck, make sure to look into the sales tax charged over those months along with the purchase price of your vehicle.
Who is not qualified for commercial truck financing?
Credit score plays a vital role in commercial truck financing. Businesses with poor credit scores can face difficulties getting approval for any financial institution. Moreover, if the business owner has faced tax liens or bankruptcy, it can put you in a bad spot with the lender you reach out to for assistance.
Having enough capital to cover the down payment along with hands-on experience in the trucking industry can help you with commercial truck financing in such matters.
The final verdict on commercial truck financing through U.S. Bank
U.S. Bank has experienced overwhelming response and growth ever since it has been in business. The main reason for such a response was their resources and industry-specific approach, which appealed to many businesses on a large scale. Additionally, the express application feature for small finances was a source of attraction for small businesses.
Even though U.S. Bank does not disclose its criteria or rates on its website, you can get great assistance once you contact them via their customer support hotline number or email. Not finding enough details on the website is not a problem for large businesses.
However, as small businesses prefer comparing rates and easy application processes to other lenders online, it can make them think twice. With no down payment and an easy application for funding of $250,000, U.S. Bank is an ideal option for many businesses. However, if you prefer to compare and decide, there are many other options on the market to ensure satisfaction.
Commercial truck financing might be an inexpensive alternative to purchasing a truck or a fleet, but it is still not a cheap idea. Therefore, it is recommended that before committing to a single platform, business owners should spend some time doing their research and getting their facts and figures straightened.