LPG Bobtail Financing for Propane Dealers

An LPG bobtail is a propane delivery truck — a chassis fitted with a DOT-spec propane tank (commonly 2,500-3,500 gallon water capacity), a delivery pump, meter register, and hose reel — and financing one usually comes down to two paths: a traditional equipment loan through a bank or specialty lender, or revenue-based funding that approves you on your bank deposits and delivery volume rather than credit alone. For an established propane dealer with clean bank statements and strong seasonal cash flow, a bank equipment loan is the cheapest capital. But when the bank stalls on time-in-business, a mid-500s FICO, a prior-year loss, or simply can't move before your heating season starts, a revenue-based advance through a marketplace can put working capital in your account in 24-48 hours, with minimums around $10,000 and credit accepted from FICO 500+. This page is written from the underwriting side: what a bobtail actually costs to put in service, how each funding route reads your file, and when to use which.

What an LPG bobtail really costs to put in service

Dealers underestimate the total in-service number because they price the chassis and forget the propane-specific build-out. A bobtail is not a truck you drive off a lot — it is a fabricated unit, and the propane package often costs as much as the cab and chassis together.

• Cab and chassis — medium-duty (Class 6-7) with the GVWR and wheelbase rated for a loaded tank. New or low-mile used.
• DOT propane tank — 2,500-3,500 gallon water capacity, ASME/DOT-compliant, with the bobtail mounting package.
• Delivery system — PTO or hydraulic pump, meter register (Liquid Controls / Neptune-style), differential valve, hose reel, and typically 100-150 ft of delivery hose.
• Safety and compliance — internal valves, emergency shutdown, remote shutoff, placarding, and DOT/NFPA 58 inspection sign-off.
• Upfit and finish — paint, lighting, electronic delivery ticketing, and route/telematics hardware.

The lesson for cash flow: a new turnkey bobtail is a heavy six-figure ticket, and even a reconditioned used unit runs well into six figures once the tank is recertified and the meter passes weights-and-measures. That is why so many propane operators split the buy — finance the hard asset one way, and cover the recertification, upfit, hose, and first-fill float with a separate working-capital line.

Two ways to fund a bobtail — and how each reads your file

Equipment financing / a term loan (bank or specialty lender). The truck is the collateral, so rates are lower and terms run for years. Underwriting is credit-first: they want two-plus years in business, a personal FICO usually north of 650, tax returns, and often a down payment. For a profitable, established dealer this is the right home for the chassis-and-tank purchase. The trade-off is speed and tolerance — a slow file, a soft credit year, or a title/recertification wrinkle can push funding past the season you needed the truck for.

Revenue-based funding (MCA-style marketplace). Instead of leading with your score, a revenue-based funder underwrites your business's deposits — the last 3-6 months of bank statements and your delivery revenue. Approval hinges on consistent cash flow, so it fits propane's seasonal, high-turnover model. Minimums start around $10,000, credit is accepted from FICO 500+, and funds typically land in 24-48 hours. Repayment flexes with your receipts rather than a fixed amortized note. It is more expensive than a bank equipment loan, so the underwriter's rule is simple: use it for speed, seasonal float, recertification, and gap costs — not as a permanent substitute for cheap asset debt when you qualify for it. See our revenue-based financing guide for how deposit-based approval works.

Many dealers run both: an equipment note carries the chassis and tank, and a revenue-based advance covers the upfit, hose, first fill, driver hire, and DOT recertification so the truck is earning on route the week it arrives.

Realistic example scenarios (for illustration only)

The figures below are for example only — every file prices to your own deposits, tenure, and volume. Notice we describe repayment as a share of cash flow, not a fixed payoff number, because a revenue-based structure moves with your receipts.

In each revenue-based case the payback is drawn as a modest, predictable slice of ongoing deposits — sized so the truck's own delivery income comfortably carries it. We do not quote a fixed total-dollar payoff here because the right structure is the one your cash flow supports, and that is decided file by file.

Decision framework — when each route works best, and when to avoid it

Use a bank / specialty equipment loan when:

• You have 2+ years in business, personal credit in the mid-600s or better, and a clean or profitable tax picture.
• You are buying the hard asset — chassis and tank — and want the lowest cost of capital over a multi-year term.
• You have lead time before your season and can absorb a 2-4 week underwriting cycle.

Use revenue-based funding when:

• Your deposits are strong and consistent even if your credit isn't — FICO 500+ is workable.
• You need money in 24-48 hours to hit heating season, recertify a tank, buy hose, or float a first fill.
• You are newer (under two years), had a soft credit year, or the bank stalled and you can't wait.
• You want repayment that flexes with receipts instead of a rigid fixed note.

Avoid revenue-based funding when:

• You comfortably qualify for a bank equipment loan and have the lead time — take the cheaper asset debt.
• Your deposits are thin or highly erratic; a cash-flow-based structure needs real, steady volume to sit on top of.
• You are already carrying advances that crowd your daily cash flow — stacking more can choke the route economics. Talk to the funder about consolidation instead of adding a layer.
• The capital would fund a truck with no committed route or gallons behind it — finance revenue, not speculation.

What a revenue-based funder actually asks for

The document load is light compared with a bank, which is why it moves fast. Expect to provide:

• 3-6 months of business bank statements — the core of the decision; they read deposit consistency, average daily balances, and negative days.
• A simple application — legal entity, time in business, and monthly revenue.
• Proof of ownership and ID — to verify the business and the guarantor.
• Sometimes a voided check or processor statements if a share of card/AR volume applies.

What matters most: average monthly deposits, how many months you've been operating, and whether your balances stay positive. A propane dealer with heavy winter deposits and a lighter summer is normal and readable — a good underwriter sizes the offer to your annualized flow, not one slow month. No tax returns, no business plan, no truck appraisal is typically required for the working-capital piece.

Timing your bobtail funding to the heating season

Propane cash flow is seasonal, and the single biggest financing mistake dealers make is arriving late. Underwriters see it every year: an operator waits until October, orders a bobtail with a long build lead time, then scrambles for a bank loan that can't close before the first cold snap. By the time capital lands, the truck sits half the season.

The operator's playbook is to line up the asset well ahead of demand and keep a fast, revenue-based option ready for the pieces a bank won't move quickly on — recertification, hose, meter calibration, a first fill, or a second driver. Because a revenue-based advance can fund in 24-48 hours, it is the tool that turns a truck that's almost ready into one that's on route the week you need gallons moving. Then, once the season's deposits are flowing and your credit picture firms up, you refinance the expensive short-term money into cheaper asset debt. For the broader menu of cash-flow tools, see our working capital guide.

Honest cost and risk — the underwriter's caution

Revenue-based funding is not cheap money and no legitimate funder should ever call approval guaranteed — approval always depends on your deposits and file. It is priced for speed and flexibility, so it belongs on short-cycle, revenue-generating needs, not on long-lived assets you could finance conventionally. Three guardrails from the underwriting desk:

• Match the term to the need. A bobtail chassis is a multi-year asset; don't carry it on short-term cash-flow money any longer than the bridge requires.
• Protect your daily cash flow. Size the advance so the truck's own delivery income carries the repayment slice with room to spare — never so tight that a slow week hurts.
• Don't stack blindly. If you already have one advance, adding another often does more harm than the capital does good. Ask about restructuring before layering.

Used correctly — fast capital to get a revenue-producing truck on route, then refinanced into cheaper debt — revenue-based funding is one of the most practical tools a propane dealer has. Used as permanent financing for a hard asset, it's expensive. The difference is entirely in how you deploy it.