News of tighter capacity and greater freight demand is good news for truck operators, said Karen Pembroke, director of credit for PACCAR Financial, which is the captive finance company for Kenworth and Peterbilt.

Still, owner-operators are proceeding slowly and cautiously, Pembroke said, not only because economic conditions can change rapidly, but also because increasing federal regulations are making the business more challenging. Fortunately, the market for used trucks is growing stronger and the ability of operators to get financing to acquire new equipment has vastly improved since the economy plunged six years ago, Pembroke said. Still, operators should be just as deliberate when choosing a lender and applying for loans as they are when determining whether to buy new equipment.

In addition to taking a fresh look at their credit report and their safety assessment, Pembroke said it’s also important to show lenders how you generate your income. Who do you haul for and how long have you been hauling for them? Lenders are looking for longevity and stability when they consider whether to approve loans.

“Be aware that if you have been driving a highway truck and refrigerated trailer and haul refrigerated loads regionally or across the country, but now you want to buy a dump truck and haul aggregate, you may have a harder time getting the loan,” Pembroke said. “In those cases, you may want to consider doing some homework and write up a simple business plan. Be sure to include the companies you will be hauling for and how you plan to generate new business. If you don’t have your own authority, determine if you can and should get it.”

Pembroke offers a list of 10 tips that can help operators improve their credit ratings or protect their ratings so that when it comes time to apply for a new or used equipment loan, their chances of an approval increase. Following these tips may also help make them eligible for the best loan rates.

To full text of PACCAR Financial article, click here.