Owner Operator Truck Leasing Requirements
“Requirements For Owner Operator Truck Leasing”
Its becoming more and more common these days for companies to reduce their headcount and corporate overhead through outsourcing many of the services they were taking care of internally.
One of the more common areas of outsourcing is trucking routes through the establishment of owner operating trucking contracts with previous employees or employees from another company.
Owner operator trucking assets can vary from highway tractors and trailers to more specialized forms of trucking assets.
In many cases, the soon to be owner operator is basically starting up a new business either as a proprietor or a corporation and financing will be required to acquire the primary asset needed to complete the contract work.
Acquired trucking assets that can be lease financed through an equipment leasing company can be either new or used.
For new equipment, the challenge with a new company with no credit history is the amount of funds that can be secured. The assessment of your application is going to be done considering a combination of your personal credit profile, personal net worth, personal cash flow, the contract you have available to you, and the amount of cash you can invest in the deal.
In many instances, the new owner operator is looking to acquire a used truck directly from the same company that is providing the operating contract.
In these situations, the asset being acquired is from a private seller, which will require a detailed review of the truck title to make sure that there are no outstanding charges or liens registered against it.
Key Requirements For Used Owner Operator Truck Leasing
When the truck asset or assets you want to acquire are used, there are a number of specific transportation leasing requirements that you should be aware of.
First of all, most leasing companies will want you to provide detailed truck specifications on each asset including trailers to better describe the features of the asset as well as its level of use and maintenance log.
Second, used assets less than five years old are going to be easier to finance than older assets, even if the older assets are lower miles or hours.
Third, most used equipment financing facilities will require a lessee or borrower down payment of at least 20% of the value of the truck being acquired.
Fourth, the owner operator is going to need to have good credit with all outstanding credit accounts paid up to date including amounts owing to the government for income taxes or other forms of tax remittance.
In addition to the above requirements, most transportation equipment leasing companies require that the owner operator own their own home.
If they don’t own a home, they may be able to qualify with a cosigner that is a home owner.
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