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When it comes to vocational equipment, finance solutions can range in complexity, especially when you consider a finance structure that needs to support the truck, body and additional equipment. Carrie Kohout, small business credit manager, and Glenn Inzinga, vocational/TEM national sales manager, Daimler Truck Financial, talk about some of the common misconceptions that can happen around financing vocational trucks.
“Banks Are the Only Lenders.”
Not only is the vocational industry as a whole complex with several segments, but this complexity also cascades down to equipment needs. More specifically, when it comes to a finance solution, you have to consider a finance structure that supports the truck, body and potentially added equipment.
“We’ve been financing commercial vehicles for more than 40 years,” says Kohout. “Though banks do grant loans for equipment, they may not have the industry expertise to be able to offer the best possible financing strategy many vocational customers need.”
A lender trained in various vocational business segments can structure finance packages to suit each individual customer’s unique requirements. “When a lender understands the factors that can impact your business, then the finance solution may support you in reaching your business goals.”
“It’s Best to Use a Bank Line of Credit.”
A line of credit is a flexible option that can allow you to strategically invest in your business. With a line of credit, you only pay interest and fees on the amount of money you borrow.
“We know a line of credit is an important benefit of working with a bank,” says Inzinga. “It can help our customers to meet their business goals, but that is also why it’s important to keep those lines of credit open.”
While it may make sense to use a bank line of credit to purchase equipment because the funds are readily available, it could impact the amount of credit available for when it’s really needed for a business. The saying, “expect the unexpected,” couldn’t apply more to managing a business. Inzinga continues, “A bank line of credit is important, but it’s not the only solution to purchasing equipment. We work with customers to consider several options when it comes to financing and look at solutions that can provide flexibility while considering risk.”
“I Can’t Afford to Upgrade My Equipment.”
The vocational industry is a costly business, and it’s not unheard of for the body or additional equipment to outweigh the cost of the tractor. That’s why most owners have to consider numerous factors when making the decision to upgrade their equipment.
“Financing can be an affordable way to upgrade your vocational equipment,” says Inzinga. “Newer equipment means better fuel efficiency and lower maintenance costs. I’ve had fleet customers look at their operating costs and find savings from financing new equipment.”
The right long-term finance strategy can help you ensure you are running the most cost-effective equipment possible, while freeing up or creating cash reserves for other investments in the business.
“I Have to Get Separate Financing for My Truck and Body.”
From utility trucks to specialty haulers and construction trucks, there are varying equipment needs within the vocational industry. Inzinga has worked with customers across numerous segments, and not one vehicle is ever the same. “When working with customers who are ready to purchase new equipment the lender has to be prepared to consider the truck, the body, potential added equipment and the production lead time,” says Inzinga.
Separate sources for financing or paying for one piece of the truck outright doesn’t have to happen. “In each customer interaction, I want to be as flexible as possible,” he says. “This means not only structuring a solution for the truck, body and added equipment, but also tailoring a solution for the specific business needs of the customer. It’s why we consider seasonal, skip or token payments, deferred or extended terms and lines of credit.”
With so much vocational financing experience, nobody does more to deliver the right financing solution with all the necessary vocational customer requirements than Daimler Truck Financial. No matter what vocational segment you are in, we provide financing that works for you!*
*Eligibility for credit will be determined by DTF’s Credit Team based upon the creditworthiness of each customer.