Daimler Truck Financial Insights: Financing Trucks with Industry Experts

Unlike many lenders, such as banks or credit unions, the in-house financing divisions of the truck manufacturers (called captives) are immersed in the trucking industry. Whether your business is struggling, growing, or just getting started, the truck finance companies like Daimler Truck Financial (DTF) are more likely to be there, trying to find custom solutions even when other lenders would walk away.

Here are five examples — click on the ones you consider most relevant for your business:

1. Getting you started or helping you expand
2. Mixing and matching to find the best solution
3. You just landed a new contract – you need trucks fast
4. Working with new truck fleet owners
5. Facing headwinds

1. Getting you started or helping you grow

   Starting and growing your business is cash-intensive. Down payments. Registration. Permits. Insurance. Hiring drivers.
   
   Many truck finance companies can provide tailored commercial truck loans or leases. When you are reviewing the truck or fleet financing options, be sure to explain your business needs so a customized solution can be created. There are commercial finance products, programs, and even flexible payment plans that may help. If you’re a new owner, and you’re concerned about making your first payments, ask during the contracting phase about how you can spread your down payment over the first few months. If you are expanding your business, a variety of finance terms can stretch your dollars.
   
   

2. Mixing and matching to find the best solution

   When you are financing additional vehicles or equipment, you could benefit from a specialized mix of loans and leases to help with your replacement cycles or potential maintenance issues. Captives have the expertise to help find the best solutions.
   
   For example, one Daimler Truck Financial (DTF) fleet customer faced a challenge. He needed to purchase 12 trucks to support a new contract he just landed. But he had concerns about how to make it affordable.
   
   DTF worked through multiple scenarios that included loans and leases, different down payment and term options, as well as flexible payment plans. Over and over, they crunched numbers, developing different options to reach the customer’s goal. Finally, they found the right plan. It called for a variety of commercial truck loans and leases, 90 days to first pay, and a limited-time finance program to help reduce the down-payment requirements.
   
   

3. You just landed a new contract — you need trucks fast

   Whether you’re replacing trucks from your fleet or adding routes, a line of credit can help you purchase vehicles quicker and easier. This tells you what your lender is willing to finance over the next six to 12 months. You can plan based on the growth of your semi truck fleet while avoiding the risk of overextending. And you won’t have to endure the headache of applying for new semi truck financing every time you add a new unit to your fleet.
   
   Many trucking companies already have lines of credit from banks to help with business expenses. But to buy new semi trucks, you may want to consider a line of credit with your manufacturer’s captive finance company. Often these lines of credit will not have fees, they will be renewed once a year, they may not require accountant-certified financials, and they use only your equipment as collateral. This keeps your bank line available for other business expenses.
   
   Many financial institutions offer lines of credit for buying semi trucks, but they often come with fees, they require accountant-certified financials, and they must be renewed regularly. They can also tie up other business assets as collateral.
   
   

4. Working with new business owners

   When new owners, including private equity firms, buy into the trucking business, they obviously know their financials. However, they often have no experience in the trucking industry, so they must learn to navigate the nuances and options of commercial fleet financing. They often look to captives for industry expertise and vehicle finance solutions that will bring a return on investment.
   
   Some firms underestimate the cash burn, for example. They struggle with the question of whether to buy new semi trucks and reduce the average age of their fleets, or run older trucks, risking an increase in both maintenance costs and downtime.
   
   Captives can look at the business as a whole and consult with the owners about how to finance trucks in a way that will meet long-term goals.
   
   

5. Facing headwinds

   When customers lose a big piece of business, or when an industry faces a downturn, the financial numbers look scary. Many lenders flee.
   
   Not captive finance companies. They dig deeper.
   
   One business recently lost a big customer, for example, and its balance sheet looked grim. But Daimler Truck Financial (DTF) looked beyond the current revenue and profits.
   
   DTF saw that this company had been in business for 60 years, how they had taken steps to recoup revenue, and how the end-of-year projections showed a new strategy. The customer then received a $2 million line of credit to replace older trucks with new ones that would save money in fuel and cost less in maintenance.
   
   Sometimes it’s not just a customer, but an entire industry, that struggles. When the oil and gas industry took a downturn, many private equity firms cut their losses and sold their business and equipment. But their trucks’ resale value had plummeted by more than 80 percent.
   
   One customer took a different approach.
   
   He downsized tremendously, but he wanted to stay in business and diversify. And to do that, he needed newer equipment. Many lenders were skeptical, but instead of analyzing the deal only on paper, Daimler Truck Financial paid the customer a visit.
   
   They reviewed his business plan. They got a better sense of his strategy. They learned of a roughly $25 million cash infusion he was planning.
   
   And they saw one other thing: a creative way to make the deal work.
   
   

Find a dealer near you to learn more about how Daimler Truck Financial’s industry expertise can help make your future fleet a reality.

Daimler Truck Financial, a business unit of Mercedes-Benz Financial Services USA LLC, provides a broad range of financial and insurance products and services for Daimler Trucks North America LLC’s commercial vehicle brands, which include Freightliner, Western Star and Thomas Built Buses. For more than 45 years, the company has been a trusted partner in the industry, creating specialized finance solutions tailored to specific customer needs.

^© 2021 Daimler Truck Financial is a business unit of Mercedes-Benz Financial Services USA LLC.