As a business owner, you know that unexpected expenses can pop up at any time, including replacing tires on your vehicles. What if there was a way to finance those new tires and spread the cost over time so there is less strain on your cash flow? That’s where commercial tire financing comes in.
Let’s take a look at commercial tire financing, how it works, and whether or not it would be beneficial for your business.
What Is Commercial Tire Financing?
Commercial tire financing is a loan option that can help you spread the cost of new tires over time, making it easier to manage the expense.
For example, let’s say you run a small trucking company and need to replace the tires on several of your vehicles. This can quickly add up to thousands of dollars, and you might not have the cash in hand to cover the cost in one payment.
With commercial tire financing, you can apply for a loan with tire financing companies to amortize the cost of the new tires. Then, you’ll make regular payments over time, with interest, until the loan is paid off.
Types of Commercial Tire Financing
When it comes to commercial financing for tires, there are three options you can choose from:
- Leasing: This allows you to rent the tires for a period of time instead of owning them outright. You make regular payments to the leasing company, and at the end of the lease term, you can choose to return the tires or buy them outright.
- Line of credit: This gives you access to a set amount of funds you can use to purchase new tires. You will make regular payments on the amount you borrowed (with interest) and can continue to draw from the line of credit as needed.
- Traditional loan: This is similar to a personal loan. You borrow a set amount of money to purchase the tires and make regular payments with interest until the loan is paid off.
How to Qualify for Commercial Tire Financing
If you’re considering commercial tire financing, you might be wondering how to qualify for it. Here are a few considerations to keep in mind:
- You should have a high credit score (600 to 650 or higher).
- Get your business finances in order, including bank statements, tax returns, and financial statements, so lenders can check if your business has the cash flow to make regular payments.
- Make sure your business history shows your company has a track record of making timely payments on other financing agreements.
Factors to Consider When Choosing Financing
Now that you know how you can qualify for commercial tire financing, let’s find out how to choose the right option for your business.
Look at Interest Rates and Fees
Check the interest rate and any fees associated with the financing agreement. Also, look for a lender that offers competitive rates and transparent fees, so you know what you’re getting into.
For instance, if you finance a $1,000 tire purchase from Cheap Tires ASAP with a twelve-month payment plan and a 15% APR, your monthly payment would be approximately $93.20.
Repayment Terms
The repayment terms are going to spell out how you need to pay back what you borrowed. Look for a lender with flexible repayment options. Pay attention to the length of time you have to repay the loan to ensure it aligns with the expected lifespan of the tires you’re financing.
Customer Service and Support
Choose a lender that’s responsive to your questions and concerns and is easy to work with. When it comes to commercial tire financing, you want to be sure you can get the help you need when you need it.
The Takeaway
If you want to keep your wheels running, commercial tire financing may be the solution you’re looking for. Like any financing option, it’s important to understand the terms and potential drawbacks before signing for the loan. Do your research, compare offers, and ensure the financing terms meet your business’s needs and budget.
However, if the thought of searching through a million lenders is already giving you a headache, Cheap Tires ASAP can help you keep your vehicles running with three, six, or twelve-month tire financing plans with 0% APR.
Want to know which is the easiest tire credit card to get? Check out our latest post!