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How to Choose the Right Financial Lender

By Patrick Gaskins | November 19, 2020
When financing fleet assets, there are several questions a fleet manager must consider when determining the right lending partner.

Originally appeared in Fleet Owner

Given the complexity and challenges in today’s trucking environment, it is more important than ever to establish strategic partnerships with your suppliers. Fleets have done that in many areas of their business but may not have thought it was necessary to do so when it comes to equipment financing.

However, technological changes on today’s equipment, the rapidly changing landscape of emerging technologies – like battery electric and fuel cell powered vehicles, ongoing regulatory issues, and the volatility of the used truck market – all point to the need for finding the right lending partner.

Here are some questions you need to ask yourself in order to determine if your lender is a strategic partner for the financing of your fleet’s assets:

  • How do you currently determine which financing partners to use to finance your new equipment purchases?
  • Do you default to your current bank group?
  • Does your current lender work with you throughout the asset replacement and planning process?
  • Does your current lender give you guidance on asset specifications?
  • Does your current lender give you input on how to spec for a higher residual value to lower your TCO?
  • At the end of the financing term, does your current lender work to help you maximize the resale value of your asset?

In many fleets, the treasury and finance departments have agency over asset financing decisions. The problem with that approach is that those departments develop a relationship with the bank that is different than that needed to support fleet operations. The goal of treasury and finance departments is to ensure access to cash and credit so the business can grow and thrive. That is very different than the relationship a fleet needs to have with its asset finance partner.

An asset finance partner needs to not only understand the fleet’s operating parameters and requirements, it also needs to have a thorough understanding of developments in the trucking industry in order to ensure assets are financed properly based on current and developing market forces. Companies in need of a strategic partner for the financing of their fleet need to look beyond the interest rate and consider the entire cost of financing fleet assets.

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