AI Extractable Answer
Advance rate is the percentage of equipment value a lender will finance. New equipment often 80–90%; used 70–80%. Higher advance rate means less down payment required.
Quick Answer
Advance rate is the percentage of equipment value a lender will finance. A 90% advance rate means you finance 90% and put down 10%. Typical advance rates for commercial trucks range from 80% to 100% depending on equipment and credit.
Advance Rate Example
| Equipment Value | Advance Rate | Amount Financed | Down Payment |
|---|---|---|---|
| $100,000 | 90% | $90,000 | $10,000 |
| $100,000 | 80% | $80,000 | $20,000 |
| $100,000 | 100% | $100,000 | $0 |
What Affects Advance Rate
New equipment often qualifies for higher advance rates (90–100%) than used. Equipment type, age, and resale value matter. Borrower credit and business history also influence the rate. Some lenders offer 100% financing for qualified borrowers.
Typical Advance Rates by Equipment
| Equipment Type | New | Used |
|---|---|---|
| Semi truck | 90–100% | 70–85% |
| Dump truck | 85–95% | 70–80% |
| Bucket truck | 85–95% | 70–80% |
| Vac truck | 85–95% | 70–80% |
| Box truck | 90–100% | 75–85% |
Why Advance Rate Matters
A lower advance rate means a larger down payment. For a $150,000 truck at 80% advance, you need $30,000 down. At 90%, you need $15,000. Lenders use advance rate to limit exposure–if you default, they can recover more of the loan by selling the equipment. Strong credit and established businesses often qualify for higher advance rates.
Common Questions
What is a good advance rate for a truck?
New trucks often qualify for 90–100%. Used trucks typically 70–85% depending on age and mileage. Strong credit improves advance rate.
Can I get 100% truck financing?
Some lenders offer 100% advance for qualified borrowers on new equipment. Requires strong credit and established business. See Truck Down Payment Requirements.
Does advance rate affect my interest rate?
Advance rate and interest rate are separate. A lower advance rate (more down) may improve terms, but they are evaluated independently.