Trucking companies of various sizes from owner-operators to those with several trucks regularly struggle to be approved for small business loans. Here are five reasons why banks often reject small business loans for trucking companies. 

Credit Score
Since your credit score gives lenders a glimpse at how likely you are to repay them, it is a significant factor in their decision to approve or reject your loan application. When applying for a business loan for a small trucking company through a bank, they will look at the credit score for the owner of the business and the business itself. Often when businesses are rejected for a loan, one of the reasons is that the credit score for the owner and/or the business were to low. A good personal credit score is typically considered to be a FICO score of 670 or higher.

Business credit history 
This is a tough one for trucking companies seeking small business loans because oftentimes, you need financing early on as you are establishing, building, and growing your business. Banks typically like to see a personal credit history that is at least three years and a business credit history of a year or more. 

Business Performance and Cash Flow
Banks want to ensure you will be able to repay the loan so they will take a look at your funds coming in and your spending. They want to ensure you have money for your daily operations and are not in the red on your financials. If they determine that you have a weak business performance and inadequate cash flow, it could mean they will reject your loan request.

Existing Loans / Debt
Banks will take into consideration other debt that your business has, such as other loans, and will often reject a loan if you have existing debt. This reason alone makes obtaining a loan difficult for trucking companies since many have had to finance their equipment in order to get started.

Insufficient Business Plan 
You need to prove to the bank clearly and concisely that you have a solid plan for the direction and growth of your business if you want to be considered for a business loan. The plan needs to be written well, include details with no assumptions. This is the only factor you have direct control to change right away.


Applying for a business loan through a bank can be a long and time-consuming process. When you combine that with their low approval rates, what should trucking companies do when they need funds? Luckily there are alternative financing options available that are easier, less time consuming, and have higher approval rates. One of those options is Invoice Factoring Financing. With Invoice Factoring Financing, the approval process takes only a few days and looks at the creditworthiness of your brokers and shippers and not yours or your business’. Plus, with Invoice Factoring Financing, your cash flow will be improved because you will receive funds within hours of delivering your loads and will no longer have to wait to get paid. Give us a call today at (801) 676-0182 to see if Invoice Factoring Financing could be the right fit for you and your trucking business.