Small Carriers Trade Truck Purchases for Repair Financing

For many small trucking companies, the next financing decision is no longer which tractor to buy. It is how to keep the current one moving.

Dave Gilbert, founder and chief executive of National Funding, said small carriers are increasingly seeking short-term loans for repairs rather than multi-year financing for new or used equipment. The shift reflects a harsher ownership equation: elevated truck prices, expensive insurance, fuel costs, maintenance bills and the revenue lost when a vehicle sits idle.

“Repair is probably the number one right now,” Gilbert said in a FreightWaves interview.

National Funding is seeing demand for bridge loans lasting roughly 60, 90 or 180 days, while equipment financing typically runs three to five years for used trucks and longer for new units. That shorter duration matters because a repair loan addresses an immediate operating hole without adding another long-lived asset to a balance sheet already exposed to volatile freight rates.

The math has grown especially difficult for carriers that cannot lock in dependable freight. Buying a truck creates a fixed payment, insurance obligation and maintenance burden whether the truck is loaded or parked. A breakdown, meanwhile, can erase the margin from multiple loads before the repair bill is even paid.

Credit conditions are not helping. Kirk Mann of Mitsubishi HC Capital America recently said financing rates range from about 5.25% for investment-grade private fleets to 12% or higher for weaker small operators, which are often required to make a down payment. Banks that withdrew from transportation during the prolonged freight downturn have left fewer lenders willing to underwrite marginal borrowers.

That does not mean equipment purchases have stopped entirely. Fleets with replacement needs, healthy cash reserves or contracted freight can still find financing, particularly for newer trucks with warranty coverage and predictable resale value. Expansion is a different proposition.

Gilbert’s warning to small carriers is simple: do not borrow against an imagined recovery. Confirm the freight, calculate the margin after fuel, insurance and downtime, then test whether the business can survive a weak month before signing.

For now, preserving uptime is winning the capital race. Growth can wait.