Buying a truck / Company start up
 

I've been running on the road for 8 years now. Most of my experience is in auto transport w/ some flatbed. I have been working for o/o's that seem to be already in the whole when I get to them and never have enough umf to help get them out to better myself.

I currently am running a hotshot auto unit and looking to buy my own truck. My problem is that my credit sucks ..........

I'm pretty sure I know all the answer that you guys are going to post here to me, but thought I would take a stab at any o/o's that know something that I don't.

Is there ANY WAY to get a small personal/business loan for $40,000-$50,000 to start this venture? I have started 2 business's by myself for other guys so I know what it takes and the steps involved. I know and understand how to run a profitable company and to actually make a good living with 1 or 2 trucks. Despite what you hear from some drivers and o/o's that don't monitor EVERY penny the business, there is still money to be made. Your not however going to get rich by driving a truck, this I totally understand.

I've always been able to be put in a truck and go out and make money. I know what its like to not sleep and cross the country in 3 days, and I ALSO know what its like sitting in tha tbox for 3 days praying for the next load outa of town/region to pop up. I take the good with the bad at all times and in the long run.........the road might take some detours and you might hit some gravel, but in the end........you always seem to get home safe. *if ya get me*.

I guess my biggest concern/question/wonder is where to look for someone to invest or help finance my start up. ARE there any options at all for me? I'm 28 and don't own a home. I have no collateral to offer, just my experience and drive to own a truck for myself one day. I have proven myself to MANY people in the last 9 years of commercial driving, but always seem to get hooked up w/ the wrong people when it comes to leasing, or taking payments over.

I'm not looking for something flashy or hip, but something reliable and trustworthy. I'm hoping to start w/ a FL Century in the $20,000 range and get a 4 car Sun Country or Wally Mo to start with. I have monitored fuel, taxes, and costs the last 4 years and know exactly what I have to make to be profitable for the company and myself.

I honestly think my goals are realalistc, I'm just lacking the ladder to reach the top self..........

I do have a simple business plan put together along with a spread**** of cost's. I can adjust it for whomever wants to view, and adjust pricing/income for various types of setups........Believe it or not....I have done my math...just lack the funding.

Any O/O's or small company owners have any advice for me that would put me at the helm of my own in 1-6 months? I know that is ALOT to ask for being in the spot that I am, but I'm hoping someone knows an edge better then me,

I would love to considering leasing a truck from an o/o that is retiring or selling, but is willing to work with someone that will prove himself time and time again. Or I'm also willing to speak with ANYone that has an interest in being an "investor" or a bank for me.. $40,000 would get me started and would could be paid back in 24mnths........unless it was stretched out..........

Sorry for writing such a novel in here, but I would like some honest opinions.........and honestly.....for the ones that want to take the time and tell me that the economy is horrible and now isn't the time...........please don't. I'm here with all you guys doing what I do and I am 100% intune to what it takes.

Thanks,

Chop

You are going to find it difficult to find financing without decent credit. Money is tight and even those with good credit are finding it difficult to get financing. From your post it sounds as though you need 100% financing for your venture. If you can find someone who will finance your equipment you will need at least 10-20% down with good credit. You will also need some working capital, even if you do mostly COD. You made no mention of insurance costs in your post. My guess is that you will pay at least $8,000/yr for auto liability and cargo insurance unless you plan on leasing to a carrier. You can find some good buys but you need good credit or cash to take advantage of them. I think you will need to start by getting your credit cleaned up and save your money for either a good down payment or pay cash. It will take time to clear your credit. You stated that you make good money but have bad credit. There is more to running a business than turning dollars. You must be a good money manager. I have known people who could make a lot of money but always seem to be broke. I have also known those who didn't make as much money but live comfortably and have most everything they want. It is a matter of money management. If you are doing as well as you profess you should be able to save at least $200-300/wk. Save for a year and you can pay cash for a truck. Save for another 6 months or year and you could pay cash for your trailer.

Gman,

That was what I was expecting to hear. I'm fully aware of the credit rebuilding process and how that will help me in the long run.

As far as "doing as well as I am".....not right now. I'm running a hotshot for a friend, but he's TIGHT right now and honestly I don't see him being interested in buying a big truck for me. I HAVE done great in the past, but it always seems to crumble 6 months in .........

Money management is my goal in life now, lol. I used to burn through my $ like fire in my pockets but now I'm a pincher. I have no problems making money and putting it where it belongs, weither it be maintance, tires, savings, etc.... I have the skills and knowledge to drive, operate, and manage myself as a company. I run this current unit as if it was my own, but don't seek the benifits as the owner. By benifits I do mean the good ones, and BAD ones.

As far insurance goes......your close, average for car hauler (4 cars) is between 9k and 13k a year, and cargo runs me 2k a year 100k coverage.

I do know what I'm doing and understand fully how to run a 1 truck operation and make it profitable. I have learned the little tricks to saving money while out on the road.

I'm just in a rut.......i screwed my credit up as a kid and didnt think I would need it.......so being an ignorant kid....is costing me now........

I was just hoping there was another avenue to help me get where I want, or.....
an investor out there, or O/O that would lease me.....etc.........

There are no shortcuts to becoming a successful owner operator, arsjohn81. Money is becoming more difficult to obtain even with good credit. There are several things lenders look at when financing equipment. Experience as an owner operator, length of time in the industry, customer base (if running your own authority) or lease and credit are the most critical things they consider. You will need to have enough cash in hand to pay at least 10-30% down on equipment. In addition you will need to at least pay 20-30% down on your insurance if you plan on running your own authority. You will also need some working capital to get you going until the money starts coming into the kitty.

I have had several former owner operators and one lease operator working for me over the years. They all seemed to know how to run my business better than me yet could not manage their own business or finances. It is easy to say that you know how to run a successful business when you are not the one who has to pay the bills. When you are the one who has to write the checks it gives you a different perspective.

If this is something you really want to do then you need to sit down and come up with a plan to make it happen. You need to start by cleaning up your credit. It won't be pleasant and likely will not be easy, but it shows that you are serious and enhances your character. It is important to take things one step at a time. Keep in mind that this is your dream, not a lender or individual who is willing to hold the paper. They are taking all the risk. Any lender will want you to assume some of the risk. If you cannot save enough for at least a good down payment and working capital then you are not likely to be able to make it in this business as an owner. I would say that most people fail in this business due to under capitalization than any other single reason. They start out without enough capital and have a major breakdown. They have been barely making it as it is and now they have this major breakdown. There is no money to make the repairs and the individual doesn't have the money to have it repaired. He is unable to borrow to make the repairs so he is out of business. He already has bad credit, now it is further worsened with a repossession when he cannot make his payments. Had he waited to save his money and rebuild his credit he would likely have been able to make it. He would have had sufficient resources to make his venture successful.

Gman,

I completely understand ever aspect that you have mentioned to me. I do know what its like to write the checks. I do that now, however I don't own the equipment. So I don't feel that having bad credit, or not having 10k in the bank to make a downpayment for my own equipment should justify a judgement agaisnt my character.

I have been working to fix my credit, and yes...that is a slow and painful process. Despite what some others get on here and say.....I'm not blowing smoke or bs'n to any means.

I have 9 years of driving under my belt with only 1 moving violation on my record (running a yellow light in fl). So doesn't that show some sort or character? I have people calling me from loads that I have hauled 3 years ago.......so, that should same something on how I operate and handle myself.

As far as leasing on........NO THANKS. We have our own authority right, and I honestly don't think I'll ever lease to a company. I figure if I can come out and make money for myself and others without "counting" on some company to do the leg work......why loose 15-25% of my income to them.

Look, my goal wasent to join this board and come out the gate screaming IM GREAT and I KNOW EVERYTHING, but.......for what it would take for me to run a profitable 1 truck operation for myself.....yes......I know I can. I agree that ALOT of guys out here don't fully undedrstand the money management part of this or get to running for themselves and start spending that money on houses, cars, toys, what ever they want....then when they break down and its 10k to do a motor and whatever.....they are left sitting kicking themselves in the ass.

I'm not cocky, or stuck up....but I am confident 100%. My crap smells just as bad as everyone elses and I don't feel that what I have posted should come down to being a judgement of character........

Yeah...I could go buy a 1,000,000 mile truck right now from a lease/finance place for $1,800 down and payments would be $1,200 a month. But the interest on a stretched 6 year loan for that truck would be out of this world. I know that isn't the option to just jump right in, same with a trailer. I'm not about to get in over my head from the get go.

My intention with the orginial post was to see if there IS alternatives for people like me. That have the skills and experience in what they do to, but lack the financial backing to start. I understand its not even a 1 way street in my situation and I'm ok with that......but was just seeking opionons and thoughts from other o/o's that might know something more then I do. Just cause I have researched this for months/years, and wanted this for 8 years.......doesn't mean that I couldn't have over looked something......

lol, I'm not here to lash out or argue with you or anyone. I've been reading this board for 3 years now, and finally decided to post. I want to make friends on here, not enemies. I also know that some of the people that post on here are blowing smoke 24/7. Some are the ones that ***** about no work, but sit around turning every short load, or too long of a load down......so then they have time to ***** while they watch tv in the t/s. That aint me by all means.

Again, was just seeking advice or ideas on alternatives to my situation other then the obvious, clean your credit up, and wait for the economy to bounce back.

Not a cerman......just a thought

Chop

I saw a truck and car hauler sitting in a yard for sale last week. I can't remember where it was exactly because I ran a different route last week trying to avoid the snow at Flagstaff. I think it was on Highway 70 or 54 in New Mexico.

If anyone runs that route on here they may be able to get you a number. If I go that way again I will get a number.

I remember it was a white Freightliner. probably a 01-03 Columbia or Century and a 7-9 car trailer. It wasn't anything fancy, just a truck and trailer.

Sorry, I didn't mean to lecture you. The only thing that I can think of is that you may find a leasing company that may work with you. I am not talking about leasing to a carrier but an equipment leasing company. There are quite a few of them around. If you have been working on cleaning up your credit they may be willing to work with you. If you can prove that you have been doing this for several years and are working to rebuild your credit they might work with you. I am sure you will need some up front money. Some leasing companies are more conservative or liberal than others. I have known of some that required as little as one payment to 10% down. You also don't need to spend $1,800/month to get good equipment. For the setup you have been discussing you should be able to get into something for less than $1,000/month with the trailer. There are trucks you can get into for as little 10-15,000 that are in good shape. Those 4 car trailers are not that expensive either. You should be able to buy both for less than $25,000. If you can then the payments won't be that high. There may also be some repos some of the leasing companies could sell you.

Gman,

Yeah, the ideal setup for what I want is a single axle w/ sleeper and a suncountry 4 car. Not a wedge or triple axle, but one with a 25/26k air brake/ride axle. I have found units from $25,000 -$40,000.

Thats why I was looking for about 40K in a loan. I could get a century for about 15K and a trailer for about 7/8K. Then insurance is about $2,500 down. That would leave me roughly $10,000 for running capitol. Being that I take COD loads......I'd have money rolling into the bank the first trip I run.

I would be pressing my luck if I blew a motor in the first 3/6 months, but I've been able to find those prices on trucks at dealers that offer 6 month bumper to bumper and or 100K /2 year complete warrenties.

I feel that with the experience I have, that wouldn't be a problem to start off with that amount. I have done my research and know what its like....I'm just tired of having that "leash" on me when money gets tight. Money is flowing for the guy, and everything is peachy.......now that money is tight........he wants me out there running, running, running.......and it shouldnt be that way, but........lol.........where else would it be different.......NO WHERE.

Gman, Hopefully you see that I have done my research and I know my #'s and the skills to acouplish what I want..........but just lacking the patience to wait another 2/3 years to do it.

Chop

You might find a car dealer who has a truck and trailer they would be willing to sell. Some of the buy here pay here lots haul some of their own cars. You may even be able to trade some of the cost out with him. I still think that you will find it difficult to find someone who will finance the rig for you without having some money in the deal yourself. Only hauling COD loads can certainly help your cash flow. A good businessman knows when to exercise patience. When you get in a big hurry you make mistakes.

Oh I agree about getting in a rush and missing something. The key fact for me is that I currently and have done this for years........I have the work, income, and skills/experience for what I doing and want to do........just lack my name on the title, ya know.

I would have some small amount to put down or what not, but no where close to being able to have running capitol and equipment. If push came to shove.....I have $5,000 that I could throw down, but I know that won't get me far, it would get me into a truck that I know for sure....I have already lined that up, but it isnt the best truck/deal for me, so I'm not doing it.......

Thanks for the feedback.......again.....

was just looking at alternatives for financing w/ my type of credit. I knew the answers I'd get, but just thought maybe someone knew something that I didn't.

chop