The best term loan for a trucking company depends on what you are paying for. For fast capital based on your loads, like an engine repair, the annual insurance premium or an equipment deposit, Merchant Fund Express is our recommended funder: it reviews sales and deposits, not just credit, and offers Spanish-speaking support. To buy trucks or trailers, an equipment loan is usually the logical choice; and if your fleet has history and you qualify, an SBA 7(a) usually costs less.
A term loan gives you a fixed amount that you repay in installments over a set period. In trucking, that structure works well for large, one-time costs, but not always for the payment gap with freight agents. Here we compare six options and help you choose.
Key takeaways
- A term loan works best for large, one-time costs: equipment, major repairs, annual insurance or expansion.
- To buy trucks or trailers, an equipment loan uses the equipment as collateral and matches the term to its useful life.
- The SBA 7(a) goes up to $5 million and covers equipment, working capital and refinancing business debt, per the SBA.
- If your problem is freight agents paying late, freight factoring may fit better than a loan.
- Your safety record, insurance and operating authority in good standing matter as much as your numbers.
- Measure the payment against your worst month of loads, not your best.
The 6 best term loan options for trucking
- Merchant Fund Express (recommended funder). Best when you have steady loads and a cost that cannot wait: an engine or transmission repair, the annual insurance premium, a trailer deposit, or payroll while you launch a new lane. It reviews your sales and deposits along with credit, considers scores from a 500 FICO, handles $5,000 to $5,000,000, often decides in 2–4 hours, and in most cases does not require collateral. Applying is free, does not impact your credit, Spanish-speaking support is available, and it accepts applicants with an ITIN (no SSN needed).
- Truck and trailer equipment loan. Best for buying tractors, dry vans, reefers, flatbeds or box trucks. The equipment backs the payment, so it is usually easier to get than an unsecured loan, and the term matches the equipment's useful life. We cover it in equipment financing for trucking.
- SBA 7(a) loan. Best for established fleets that want the lowest cost. According to the SBA, it goes up to $5 million and can be used for machinery and equipment, working capital, real estate (for example, a yard or a shop) and refinancing business debt. It asks for good credit, history and complete documents. Since March 1, 2026, 100% of owners must be U.S. citizens or nationals. Read SBA loans for trucking and logistics businesses.
- Bank or credit union term loan. Best if you have years with your bank, good credit and clean numbers. It usually costs less than an online option, but takes longer.
- Online term loan. Best if you prefer a digital process and your revenue is steady. Compare carefully: some come with daily or weekly payments that pinch in weeks without loads.
- Freight factoring (alternative). It is not a term loan, but we include it because many carriers ask for a loan when their real problem is that freight agents and shippers pay in 30 or 60 days. You sell your invoices and get most of the money today.
How we chose. We do not use ratings, scores or invented statistics. We compare each option only on criteria you can verify: speed, minimum time in business, minimum credit, whether it accepts ITIN holders or owners without an SSN, documents required, amounts and collateral. In trucking we give extra weight to speed for repairs and to whether the term fits the equipment's useful life. The full method is in how we rank business funding options.
Comparison table for trucking companies
| Option | Speed | Requirements | Collateral | Ideal use |
|---|---|---|---|---|
| Merchant Fund Express | Decisions often in 2–4 hours | Sales and deposits; from 500 FICO | Not in most cases | Repairs, insurance, working capital |
| Equipment loan | Days | Equipment, history and credit | The truck or trailer | Buying equipment |
| SBA 7(a) | Weeks or months | Good credit, history, citizen owners | Usually required | Fleet, yard, refinancing |
| Bank / credit union | Weeks | History and good credit | Sometimes | Planned growth |
| Online | Days | Steady revenue | Varies | Mid-size costs |
| Freight factoring | Days | Your customers' creditworthiness | The invoices | Freight agents who pay slowly |
What funders look at in a trucking company
- Active operating authority and USDOT number, and how long you have been running under them.
- Current insurance. Liability, cargo and physical damage. A canceled policy is an immediate red flag.
- Safety record. Inspections, violations and accidents. A clean record builds confidence.
- Deposits and customers. How many freight agents or shippers pay you and whether you depend on just one. Customer concentration is a risk.
- Fleet condition. Year, mileage and maintenance on your trucks. Older equipment is worth less as collateral and breaks down more.
- Fuel costs and seasons. Explain your strong and slow months; on many lanes, the first quarter is slower.
Which one to choose for your situation
- The engine blew and the truck is down: every day off the road is a lost load. Prioritize speed with working capital.
- You want to add a truck or trailer: an equipment loan; if you qualify and can wait, compare a 7(a).
- The annual insurance premium is due: ask your agent about payment plans; if that falls short, a short-term loan can cover it.
- Freight agents pay you in 45 days and you cannot make payroll: freight factoring or a line of credit. A term loan does not fix a problem that comes back every month.
- You are an owner-operator with one truck: see the best funding for truckers, built for your situation.
How to check whether the payment fits
Before you sign, run this exercise with your own numbers:
- Take your worst month of the last twelve, not the average.
- Subtract your fixed and variable costs for that month: fuel, insurance, maintenance, current equipment payments, tolls and payroll.
- Compare what is left with the new payment. If the payment eats almost all of it, the loan is too big or the term too short.
- Check the frequency. A daily or weekly payment weighs differently than a monthly one when freight agents pay in 30 days.
- Ask about prepayment. Knowing whether you can pay early without a penalty changes how offers compare.
Do this for each offer you receive, using the same worst month every time, so you compare them on equal footing.
Documents to have ready
- 3 to 6 months of complete business bank statements.
- USDOT number and operating authority (MC), if it applies.
- A current certificate of insurance.
- A fleet list with year, model, mileage and VIN.
- Recent invoices or reports from your freight agents and shippers.
- Government ID and your SSN or ITIN, depending on what each funder accepts.
- For equipment: the seller's quote or invoice with the VIN.
Two details that speed up review in trucking. First, make sure your company's legal name matches across your bank account, USDOT registration, insurance policy and EIN; name mismatches are a common cause of delays. Second, if you get paid through a factoring company, keep its reports handy, because your deposits will come from the factor, not from each freight agent. Explaining that up front avoids questions and shows the funder who your real customers are.
Common trucking loan mistakes
- Financing a truck on a very short term. A high, frequent payment on equipment you will use for years squeezes your cash flow; use an equipment loan.
- Using a term loan for a collections problem. If you run short every month because freight agents pay late, the problem keeps coming back. Look at factoring or a line.
- Buying equipment without an inspection. A cheap truck with engine problems can cost you more than the loan.
- Stacking fundings. Several payments at once leave the company gasping. If a payment is already tight, look to lower the payment before borrowing more.
- Signing without reading. Ask about personal guarantees, penalties and what happens if a truck goes out of service. Ask for an explanation in Spanish if you need it.
When your documents are ready, Merchant Fund Express is free to apply and does not impact your credit. Leer en español
Frequently asked questions
What is the best term loan for a trucking company?
It depends on the use. To buy trucks or trailers, an equipment loan is usually the logical choice. For an established fleet with good credit, an SBA 7(a) usually costs less. For repairs or urgent costs, fast funding based on your deposits gets you rolling again without waiting weeks.
Can I get a trucking business loan with an ITIN?
It depends on the funder. Merchant Fund Express accepts applicants with an ITIN, no SSN needed, and some equipment lenders also work with ITIN holders, especially with steady deposits. The SBA 7(a) now requires every owner to be a U.S. citizen or national. Talk to an immigration attorney about your situation if you have questions about your status.
How long do I need my operating authority?
It varies. Many funders prefer at least several months of operations with steady deposits, and banks usually ask for two years or more. If your authority is new, an equipment loan with a down payment or freight factoring is usually more accessible at first.
Is a term loan or factoring better for trucking?
If you need money for something big and one-time, like a truck or a major repair, a term or equipment loan fits. If your problem is freight agents paying in 30 or 60 days and it repeats every month, freight factoring usually solves it better.
Do I need collateral for a trucking loan?
It depends. With an equipment loan, the truck or trailer is the collateral. SBA lenders and banks may ask for additional assets. Our recommended funder does not require collateral in most cases, because it bases its decision on your sales and deposits.
What if my truck goes out of service and I cannot make the payment?
Talk to your funder before you fall behind. Many lenders can offer a deferral or temporary arrangement if the hardship is short term, like a repair. Get everything in writing and keep paying what you can while you negotiate. Current physical damage insurance protects you in these cases.