Rent To Buy provides an excellent opportunity to get into the trucking industry when normal loan financiers are not able to provide assistance.
What Is Rent To Buy?
Whilst the name may be confusing in nature, you will be making payments just like any other typical loan arrangement. You will have the opportunity to own the truck if you wish for this happen.
One of the key benefits that after one year of your agreement, you will have several more options than a standard finance contract would offer up. These include:
- You are only owing a portion of the original purchase price; armed with your strong payment history, and now-consistent financial information available from your business, you may now have the chance to be approved by a mainstream lender.
- If no longer want to remain the business, you can hand over your truck.
- If you intend to upgrade your truck, you will be able to trade it in, or use it as an asset as part of your trade in (depending on financial circumstances and values of your ‘new’ and ‘old’ trucks.
Why Would I Consider Rent To Buy?
If you are a fresh and new business, the road to getting finance isn’t particularly easy. This is just the same in the truck finance industry, and it can be said that it is harder to get than a home or car loan. This is due to there being no proof of your ability to make repayments. The following are key items that financiers are looking out for:
- Previous proven history of paying back credit.
- Deposit available to reduce the amount of exposure and risk.
- Relevant industry experience, inclusive of driving.
- Fallback positioning (available cash, or ability to find capital in the event of any unforeseen problems).
- Backing with other assets (such as property)
- Proof of solid profitability
It is important that when considering rent to buy, that you take a long-term view of your business, and not just think of the first 12 months and the rush to mainstream financing.
If you have done your homework, can afford to meet your financial obligations, and are confident in your business’ ability to develop and thrive, then rent to buy is a legitimate option to help you get your foot in the door in the industry where financing may be impossible otherwise.
Lenders such as Rob Sinclair Equipment Finance are ideal to work with, as they are similar to the mainstream, but are able to take on more risks. You’ll pay a higher interest rate over the overall length of the loan to mitigate any risk they may see upcoming,