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Complete Guide to Dump Truck Financing

Complete Guide to Dump Truck Financing

Are you looking to buy a dump truck and you’re interested in learning more about dump truck financing? Well, you’re in the right place! This is your complete guide to dump truck financing. We’ll cover the most frequently asked question about how to finance a dump truck.

Dump Truck Financing

What is dump truck financing?

What is dump truck financing? We get asked this question all the time. Buying a large piece of equipment like a dump truck is a big financial commitment. Typically business owners need commercial truck financing to make the purchase(s). 

As you know dump trucks can be expensive. Brand new dump trucks can cost $200k or more. Not everyone has that kind of cash just lying around. That’s where dump truck financing comes into play. Financing your dump truck is a great way to improve cash flow, and cash is king!

Commercial truck financing is different than traditional auto financing. The lender will require that the equipment is for commercial use and not personal. The dump truck you finance is also the collateral. Same as with personal vehicles, If you don’t pay they take it away. This helps to elevate some of the risk to the lender.

There are 3 types of financing options when it comes to dump truck financing.

  1. Conventional Dump Truck Loan – With a conventional loan the dump truck you purchase acts as collateral the same as with personal vehicles, If you don’t pay they take it away. This helps to elevate some of the risk to the lender. You pay interest and have a term length. 
  2. Dump Truck Lease – With a dump truck lease you would make payments to use the dump truck for a set period of time. After your term is up you have the option to purchase the truck for the residual value at the end of the lease or you can return it. 

A lease can offer lower monthly payments than a loan, but higher interest rates could make it more expensive than a loan at the end of the lease.

  1. Equipment Finance Agreement (EFA) – An EFA or equipment finance agreement is a type of commercial financing where the customer takes ownership of the vehicle or equipment upfront and pays the lender a set monthly payment on a schedule agreed upon by both parties, the lender and the customer.

Equipment finance agreements aka EFAs have some advantages compared to standard bank loans. When you get a simple interest loan from a bank, the bank will require collateral. Often, they’ll apply a lien to other assets not just the truck as collateral for the loan. 

With an EFA, your financing partner has a security interest in the vehicle or equipment itself, so you often won’t need any additional collateral, the financed vehicle or equipment serves as the collateral for the financing. EFA’s are very popular in the equipment financing world.

What Are The Benefits of an EFA?

According to ELFA, the Equipment Leasing and Finance Association about 80% of businesses use some time of financing when purchasing equipment. 

There are several benefits to financing your commercial vehicle and equipment rather than outright buying them. Here are some of the reasons why business owners love equipment financing:

  • Cash Flow – Cash is king! Having more cash in your account the better. Financing can free up your business’ financial reserves and give you flexibility. 
  • Speed and Convenience  – Equipment finance agreements can be fast! In some cases, you can get funded within a few days. If you have all your ducks in a row you could be funded within 24 hours.
  • 100% Financing – Simple interest typically require a down payment. EFAs typically don’t require a down payment. EFAs also will cover the total amount of the purchase. But if you do put money down you can reduce your monthly payment.
  • Keeping Equipment up to date. – Financing allows you to upgrade your vehicle and or equipment and reduce the risk of older equipment breaking down.
  • Tax Advantages Section 179 EFAs allow your business to receive Section 179 deductions to claim bonus depreciation in the same year you purchase your commercial vehicle and or equipment.

How to finance a dump truck?

When it comes to financing a dump truck lenders are going to take into consideration several factors before they approve you for financing. Not all of the factors are about your credit. Here’s a brief list of criteria lenders consider.

  • Your time in business.
  • Make, model, miles, and year of the dump truck.
  • Your credit score.
  • Do you have commercial financing history.
  • Down payment amount.

Lenders will probably ask for the following documents (but not always). Every situation and finance company has its own requirements.

  • Business licenses
  • Business bank statements
  • Cash flow statements
  • Tax returns
  • Business entity documents.

Here are 4 steps to the financing and buying process for a dump truck.

1. Determine Your Eligibility

Before you go dump truck shopping we recommend getting pre-approved first for dump truck financing. By being pre-approved first you’ll know how much you can spend. Oftentimes buyers will want to buy a brand new shiny Kenworth for $200k but can’t get approved for such a high dollar amount. You also need to know how much the payment will be for budgeting. This will allow you to make smarter decisions for your business.

It’s always best to deal with a reputable commercial finance company that specializes in dump truck and commercial vehicle financing.

We’ve partnered with one of the nation’s best dump truck financing companies, TopMark Funding.

TopMark Funding has been helping business owners like you grow their fleets and increase their revenue by offering expert advice, flexible terms, low down payments, and great rates for qualified customers. 

They can tailor a dump truck financing program to fit your monthly budget, improve cash flow, and help grow your business.

One of the biggest advantages of financing with TopMark Funding is that they deal with 25+ funding sources. Their pre-qualification process is quick and easy with no hard inquiries. Inhouse finance managers and brokers have a bad habit of shotgunning credit apps to several funding sources triggering harmful and unnecessary hard inquiries and lowering your credit score.

2. Find Your New Or Used Dump Truck

Here’s the fun part of the dump truck financing process: shopping for your new or used dump truck! We always recommend buying your dump truck from a reputable dump truck dealership.

When you start looking for a dump truck for sale you should take into consideration several factors. Here’s a list of suggestions that will help during the buying process.

Buy From a Reputable Dealership

We always recommend buying from a reputable dump truck dealership. Nothing is wrong with buying from a private party, but it’s always better to be safe than sorry. Especially when you’re spending a bunch of money and your income relies on a reliable truck.

What You’re Going to Hauling

Dump truck 101 – what are you hauling and how much does it weigh. This is a very important question and answer. You want to look at the gross vehicle weight rating (GVWR) of the make and model of the dump truck you’re looking to buy.

To reduce damage to federal highway roads and bridges, federal law limits the gross weight of trucks based on the number and spacing of axles.

Determining what you’re going to haul on a regular basis will help determine which type of dump truck you’re going to need. (A detailed list of the different type of dump trucks above)

Determine Your Engine Size

Many of the dump truck manufacturers come equipped with similar engines. Whether it’s a Cummin’s, Detriot Diesel, Paccar Engines. Mack has its own line of engines named the Mack MP Engines. 

You’ll need to determine what you’re going to haul and what the GVWR is going to be. You’ll need enough horsepower and torque to efficiently haul your loads. Not having enough horsepower can cause issues, and buy an engine that’s too powerful may be more costly. You want to find a happy medium of power and fuel efficiency.

Type of Transmission You Prefer to Drive

Depending on your dump truck make and model you’ll be able to choose between manual or automatic. 

There are several pros and cons between manual vs automatic. A lot of it has to do with personal preference, the make, and model of your dump truck, and what your skill level is when it come to driving a manual transmission.

The old school driver loves the control of a manual transmission. But, the newer automatic transmission is easy to drive and very efficient. 

Automated manual transmission is gaining popularity. It eliminates the clutch and the hand shifting of a manual transmission. Instead, electronic sensors, processors, and actuators do the shifting to match travel speed with the load and job application.


Depending on the make and model of your dump truck, the manufacturers typically have two choices of axle positions. Axle forward and axle back. 

The positioning of the axles can greatly affect your turning radius and maneuverability. If you need to be able to make tighter turns you probably want to look at an axle-back dump truck configuration. 

3. Good Dump Truck Insurance

Before you can take possession of your dump truck, you’ll need to have dump truck insurance. dump truck lenders will make sure you have good dump truck insurance. 

Just like anything else in life, you get what you pay for. Your dump truck and business are valuable assets and you don’t want to be under-insured and liable for the potentially massive repair and legal bills.

Lenders required coverages:

  • Liability coverage
  • Physical damage coverage
  • Cargo and storage coverage that covers what you’re hauling

If you own a fleet of dump trucks and have employees driving for you, you’re going to need workers’ compensation. Contact your local business insurance agent for more details.

Lenders will not allow you to finalize the deal without the correct type of insurance for a dump truck. 

4. Submit All Documents And Get Funded

Once you’ve picked out your dump truck that meets all the requirements and you have the proper insurance in place, it’s time to finalize your funding. Contact your finance specialist to finalize your application.

Depending on who you finance through, documents will be generated and then emailed for review and signature. An electronic signature is acceptable on most documents.

After the signed contract is returned, your finance company will process your documents. Most transactions fund within 1 to 3 days.

Where to find dump truck financing?

There are several choices when it comes to dump truck financing. You can use your traditional big banks like Wells Fargo or Bank of America. You can try to go through the manufacture as well. Then there are commercial financing companies that specialize in commercial trucks and equipment. 

Here’s a breakdown of the pros and cons of each type of finance company.

Big Banks – The big banks are great if you have a profitable thriving business. You’ll probably get the lowest interest rates from one of the major banks. But, they also have the strictest requirements and they tend to only want to deal with the big guys.

  • Pros – Lower interest rates.
  • Cons – Hard to get approved and your rep has little to no equipment financing experience.

Manufacturer Financing – This is a great option if you’re buying a brand new truck with great credit and excellent business history. If your credit is fair or good, this might not be the choice for you.

  • Pros – Lower interest rates and they understand truck financing.
  • Cons – Harder to get approved

Equipment Finance Companies – These lenders fit the bill for most dump truck companies. They’re more lenient on credit and flexible with terms. But the rates may be higher. This is fine considering you need this truck to generate revenue. If you can’t get approved by the bigger banks or the manufacturer, then you can’t buy the truck, which means you can’t make money.

  • Pros – Better chance of getting approved
  • Cons – Slightly higher rates

Commercial Finance Brokers A good broker like TopMark Funding is usually the best choice. Larger broker deals with several funding sources and can leverage their buying power to get you better rates and can find you a program that fits your business needs. Simply put, they’ll have more options for you. 

Finance companies like TopMark can also fund repeat schedules for you. If your business is growing fast and you need more trucks oftentimes the big banks won’t fund repeat transactions. Whereas TopMark Funding specializes in repeat scheduling and fleet growth.

  • Pros – Better chance of getting approved, more options, better service.
  • Cons – Potentially higher rates.

How many years can you finance a dump truck?

Depending on your business goals, monthly budget, and credit score, dump truck financing terms can range from two to six years. It really comes down to what you can get approved for and how much per month you can afford. 

What credit score is needed to buy a dump truck?

As we mentioned in a previous section in this article there’s more to dump truck financing than just credit score. But typically you want to have at least a 650 credit score or higher to qualify. 

Other factors come into play when getting approved for dump truck financing such as time in business, make, year, the model of truck, business financials, etc…

How much does it cost to lease a dump truck?

There are many factors that determine how much your dump truck lease is going to cost you on a monthly basis. Length of term, interest rate, down payment, and of course the price of the truck.

The real question is how much money will I make per month from this dump truck? If you stay within your monthly budget and monthly revenue projects you’re going to make a profit on your dump truck. If your truck payment is higher than you prefer you can put down a larger down payment, agree to a longer-term, or find a dump truck that is priced less. 

The bottom line

When it comes to dump truck financing you want to deal with a reputable finance company. Whether you have a good relationship with a big bank or you want to deal with a more specialized equipment finance company like TopMark Funding. Having a lender that understands your business goals is critical to your companies success. 

Leveraging your commercial credit and help with cash flow, expanding your business, and ultimately help with generating more revenue and adding profit to your bottom line.