Which trailer financing is the best for me or my company?
Trailer financing www.sheffieldfinancial.com is available for all types of trailer types and companies. The key issue is to understand what the major differences are in traditional bank financing, and the other options that are available in the marketplace. Many people finance their dump trailers, roll off trailers, splicing trailers, gooseneck trailers, concession trailers, and even small utility trailers with banks or leasing companies. Central Trailer Sales would like to help customers out to demystify the financing component of purchasing a trailer, and help you make the best decision not only from the cost of financing your trailer, but on the actual tax deduction or depreciation you may be eligible for on your purchase.
Traditional trailer financing is based on your personal fico score, or business credit history. The financial institution will then determine the rate of interest that they will be willing to finance your trailer over the period of time you would like to pay for your trailer. Most banks, credit unions, and financial institutions will finance a term between 12 and 60 months; or 1-5 years. Interest rates on trailer financing is based on the rate that the FED open market committee establishes based on the current economic conditions. Trailer financing rates have varied tremendously over the past ten years. One thing to consider when financing a trailer with traditional financing is that your trailer will typically be depreciated over a period of time. This means that only a portion of the trailer will be tax deductible based on the trailer's lifetime.
The first half of a loan payment is mostly interest on the loan with a very small portion of the payment being applied to the actual principal amount of the loan. The later half of the loan is when more principle is applied to the principal trailer balance as the loan nears maturity. The loan may be paid off befor the actual trailer asset is fully depreciated.
A fantastic alternative to traditional trailer financing are companies that utilize their own technology platform to finance trailers. These companies like www.clicklease.com have their own internal process that is not based on your personal FICO score or your business credit score. These companies look at your bank balances, bank cash flow “money in money out,” and other credit considerations that are not related to traditional trailer financing. In short, they do not run your credit at all, however they will utilize your social security number, or EIN number to determine that you are who you say you are when you are purchasing your trailer.
These fintech or financial technology companies do not pull your credit and have their own proprietary method of determining trailer finance rates, and credit approvals. Their approval times are extremely fast as their entire process is automated. Companies like clicklease actually have you manage the entire process digitally from start to finish. The most important component of financing a trailer with clicklease is that you are able to write the entire payment off your monthly or annual income, and achieve the maximum IRS tax deduction as the loan is first a lease that converts into a buyout on the last 3 months of the lease term. This means while you are paying for the trailer you are getting the maximum deduction and then owning it outright on your last payment. When we buy assets or capital equipment for our trailer business we will always lease, and then buy out the term to get the full IRS benefit on our taxes.