It’s a bit tougher to get Semi Truck Financing in this post recession economy. We have posted a video explaining what you can do if you have been Declined by a truck financing company and ways of turning that into an approval. Check out the video here:
Hello. This is Jason Dasher with Capital Solutions. In this video we are
going to talk about, you’ve been declined for semi truck financing and what
you can do about it. Because you’ve had a decline from a financing company
doesn’t necessarily mean that you’re out of the game and you don’t have any
alternatives. So we’re going to go through, first of all, some of the
common reasons why people get declined and then we’ll get into some ways to
fix that.

Getting declined in this post-recession economy, lenders, as you already
know, have tightened up. So they’re really looking through a magnifying
glass and looking for, I don’t want to say reasons to decline a deal, but
they’re being more particular.

Low Credit score is the obvious one. Different lenders have different
thresholds. I’m hearing 675 to be the most common one, but there are
certainly other ones. I’ve heard as high as 725, which seems crazy to me.
But low credit scores are the number one reason people get declined. That
threshold has gone up since the recession.

Poor debt-to-income ratio, you see this on more expensive transactions
where the lender wants to see how much income you have to how much payments
you have going out there every month. Obviously they’re looking for as much
income coming in as possible relative to the payments that are going out
every month. So the greater that ratio the better off you are.

We get a lot of people that call us, they’ve been declined, they have great
credit, credit scores are high, but the last three months, for whatever
reason, their income has tapered down. So it throws that debt-to-income
ratio off, and they can’t get approved. Time in business, two years is
generally the norm for most truck lenders. If you don’t have that time in
business, that can be an issue.

Past serious credit derogatories, obviously bankruptcies, repossessions,
tax liens, slow pay on mortgage, which is a common one now, and
foreclosure. These are the common reasons people get declined and there are
ways of working with this. It won’t help every single time. But we’re going
to get into that, how to maybe come back to a lender. Or, preferably, if
you know you have these derogatories, or these problems, going in, you
address them going forward.

What we can do about it is address the issues up front. That’s the best way
of doing it. If you know you have a low credit score or you don’t have the
time in business, or something like that, if you have access to a good
credit co-signer – preferably one that’s been in the trucking business for
a while – go into that from the beginning. Obviously you want to try to go
in without a co- signer. But if you really need that truck, and you’ve
already been declined by other dealers, etc., then take that co-signer in
on the first pitch and get the deal done. That’s one way of doing it.

If you have debt-to-income ratio problems, you can redo your profit and
loss statement. Obviously, don’t lie. But you can shift things around with
the aid of an accountant or if you know what you’re doing, you can do it,
and you can make that P&L a little more pretty.

Explanations of past credit issues, good one. A reason people have bad
credit, they had a health issue. They were sick or something and that took
them out of the game for a period of months or something like that. A
letter from a doctor, believe it or not, going in with the initial
application, is a good way of addressing up front by saying, “Hey, listen.
I’ve had this issue. I’m bringing it up from the beginning, and here’s a
letter showing that I’m not B.S.-ing you and this explains why I have
this.” It works for past repossessions, past slow-pays, especially on truck
payments, etc. So there are ways to address it. Not every lender is going
to buy it, but it ups your chances.

Additional collateral, which is, of course what we do. If you have any of
the before mentioned things, bringing additional collateral to the table
can help overcome almost all of these things. That could be other
commercial trucks you own, heavy equipment, or real estate.

I think that covers it. I am Jason Dasher with Capital Solutions, if you’re
watching this on YouTube, our web address is down there. You can clink on
it. I’m still learning this video thing. You can go to our website if you
want to learn more about what we do, or give me a call. Even if you don’t
have additional collateral, but you want to bounce some ideas off of me,
give me a shout and maybe I can steer you in the right direction. Good luck
out there. I hope all goes well. Thanks.