Starting your own trucking business part 1 acquiring your equipment

When you are starting your own trucking company, there are many decisions, both big and small, that need to be made before you can haul your first load. This is the first in a six-part series covering the key financial considerations for starting your own trucking business. 

Financial Consideration 1: Acquiring equipment to start your own trucking company

Acquiring trucking equipment has to be one of the first things you do when starting your own trucking business because, without it, you can’t haul any loads. Depending on your financial situation and business plan, you have a few options to acquire what you need. The first option is paying for the equipment all in cash upfront. The second option is to lease or finance the equipment. Each option has its own set of pluses and minuses to consider. 

Acquiring equipment with cash 

With all cash up front, you can save yourself some money in the long run since all your other options for financing include some amount of interest payment. However, you need to consider what, if any, cost you will incur by not having access to those funds. What will the cost be to your business with the funds tied up in the equipment? Will you still have access to the funds you need to pay for fuel? Will you have the cash flow to cover maintenance items? What about funds for all the other financial considerations required in starting and running a trucking business?

Acquiring equipment with a lease or other financing

Leasing and financing are similar in the fact that you need to partner with a financial company to help you acquire the equipment. With both options, you must sign a contract for a specified period in which you will make payments at a specified amount. A few key differences between the two include:

  • The amount of the payment.
  • What happens at the end of the contract. With leasing, you will need to return the equipment to the leasing company or negotiate terms to purchase it, and with financing, the equipment will be yours. 

The most significant benefit to partnering with a finance company to either lease or finance your equipment is that you are not handing over a considerable sum of money at one time to acquire the equipment, leaving you with limited funds to cover other expenses. Some tax benefits can be realized based on the type of financing you choose. 

Regardless of how you acquire your equipment to start your trucking business, the most significant factor needs to be how that option fits with your overall financial plan. An excellent place to begin is with a company that offers several options. A company that offers both leasing and financing can help you determine which option is best for you by listening to your needs and walking you through what might work best for you.    

Starting a trucking business and want to learn more? Check out the other articles in our 6 part series on financial considerations for starting your own trucking business.

Acquiring Equipment – Part 1

Secure the appropriate licenses and permits – Part 2

Obtaining insurance – Part 3

Partner with reputable shippers and brokers – Part 4

Secure Financing – Part 5

Research ways to save on fuel – Part 6