Question – I’ve been in business just under two years and to get a trucking business loan as we are in a booming marketplace. First full year of gross revenue just under $100,000.00. We need to get a small business loan to expand our web site and to assist in purchasing new equipment. We have established credit via credit report agencies including Dun & Bradstreet.
Our Response – Traditionally transportation businesses loans are difficult to come by as businesses in that industry are the second most likely to default on a loan after restaurants. Reading the question made me think that they may be looking into more of a niche business outside of traditional trucking, so I contacted them to find out more.
It turns out they are looking at a niche business transporting goods (non trucking) and I promised to not disclose their idea on our site. Since they have a niche idea (and a signed lucrative contract) this would change my recommendations. In their favor, this is an existing business and the contract is going to allow them to grow significantly through the hiring of employees. They will have to purchase vehicles, update their website and want some working capital to have a little extra money on hand to cover while training the new employees. They were going to be short on collateral (about 70% with all of their total sources) which was their biggest issue in getting financing. Their business is in Illinois and my first recommendation was working with a bank that is involved with the Illinois Capital Support Program. Basically this program puts money in the lending institution to cover the borrower’s collateral shortfall and make it possible for the borrower to get the loan. As the loan is repaid, the State’s collateral is slowly returned to the state until the collateral shortfall is eliminated.
We found a bank that was enrolled in the Collateral Support Program and the State was able to come in to add additional collateral and the bank was able to make the loan.