Trucking companies often face significant challenges in securing credit due to the industry’s inherently volatile cycles and operational uncertainties. Freight demand can vary seasonally or even year to year, and cash flow is frequently impacted by delayed payments from clients. All of these factors make it difficult to meet consistent financial obligations.
Additionally, many transportation businesses lack the extensive credit history that traditional lenders require, which complicates access to financing. These issues are compounded by high operating costs such as fuel, maintenance and insurance, leaving smaller operators struggling to build the financial stability necessary to qualify for conventional loans.
Commercial Credit Group is an industry-leading commercial finance company that offers flexible solutions for transportation businesses based on a model of relationships over rigid data.
Dale Delmege, western region vice president of CCG, says traditional lenders are not a reliable source of financing for heavy equipment.
“When they’re comfortable, traditional lenders will lend to trucking companies, but they aren’t committed to the cyclical nature of trucking,” Delmege said. “Smaller fleets can’t rely on the banks through difficult times.”
Freight is intrinsically associated with fluctuating revenue streams, and it’s typical for many trucking companies to experience financially lean seasons.
“No one can change the fact that it’s hard to perform with a perfect credit record in trucking,” said Delmege. “That means a lot of small and mid-sized carriers are less attractive to the banks and don’t necessarily fit the model for captive finance companies.”
Due to the cash flow volatility in trucking, borrowers often run into eligibility issues based on a history of just one or two missed payments. Most financial institutions operate with rigid rules based on specific requirements, and one set of difficult circumstances can permanently ruin a small fleet’s ability to finance.
Whether via rates, terms or volume, these trucking companies are often at a borrowing disadvantage compared to small enterprises in other industries.
Unlike traditional banks, CCG has built its business model around forging personal relationships with the individuals who run trucking companies.
“We are a company who will listen, because we know the industry intimately,” said Delmege. “In fact, in most cases we don’t lend without first going out to see the business firsthand.”
Sometimes, there are perfectly legitimate reasons for a trucking company to have a stain on its record, and Delmege says CCG wants to work with each organization on a case-by-case basis.
A small local fleet might have an opportunity to land lucrative contracts or meet the needs of a growing market, and CCG is there to help prospective borrowers take advantage of those moments when mainstream lenders would disqualify them.
“We get to know companies and collect financial data because it’s valuable, not because it’s a disqualifier,” Delmege said. “The bank will see your history and say, ‘No, we will not lend you more money – period.’ We don’t operate that way. We do business with people, not numbers.”
Most lenders won’t allow for cash-out restructures. If a business is cash-starved, that typically means the business is distressed. CCG, however, understands that freight cycles are temporary and subject to change.
“We won’t penalize someone for being in the trucking business,” Delmege said. “We know our customers and trust their character, so with our expertise we can usually create a finance solution based on their particular needs.”
Since 2004, CCG has been providing equipment loans, working capital loans and other financial solutions for companies in the transportation and heavy equipment sectors, and during that time, the organization has maintained relationships with many of the same partners.
“We have customers who have been with us the whole time, and they’ve gone up and down – but we’ve always been there for each other,” Delmege said.
In determining whether a company will be approved for a loan, CCG relies on personal connections and partnerships rather than inflexible protocols and credit statements.
“We look at three things,” Delmege said. “Most important is the character of the borrower: Do they take responsibility for their obligations and openly communicate? Second, who are they, and what type of collateral does their operation maintain? Thirdly, we look at cash flow.
“Cash flow and asset-to-liability ratios are all most banks will look at, but we take a lot more into account when we get to know a company,” Delmege said.
Additionally, CCG sales representatives act as consultants for their borrowers. “We want to succeed together, and we can help with our asset management expertise,” Delmege said. “We’ve found that there’s a real need for independent finance companies who know trucking.”
With over 11,000 unique customers, CCG is equipped to provide commercial truck loans and heavy equipment financing to a variety of clients, and it is expanding its reach daily.