How to Start a Trucking Business with No Money

Thinking of starting a trucking business with no money? Your most viable approach involves procuring a commercial truck loan. These loans provide the means to acquire the necessary vehicles to propel your business forward and beyond.

As per the American Trucking Association’s report, the trucking sector produced a revenue of $791.7 billion in 2019, representing 80.4% of the country’s total freight expenses.

With such a vast market potential, many people dream of starting their own trucking business and becoming their boss.

However, starting a trucking business takes work, especially if you have no money. Trucking is a capital-intensive business that requires a lot of upfront investment and ongoing expenses.

You need to buy or lease trucks, pay for fuel, maintenance, insurance, permits, licenses, taxes, and more. You must also find reliable drivers, customers, and brokers to keep your business running.

So, how can you start a trucking business with no money? Is it even possible? The answer is yes, but you must be intelligent, resourceful, and determined.

How to Start a Trucking Company With No Money

Embarking on the journey of establishing a trucking company without initial capital necessitates collaborating with a lender open to funding your vehicle fleet and initial start-up expenses. Exploring diverse business loan possibilities, like commercial truck and equipment loans, would be advantageous.

Initiating the application process with a lender entails its own set of procedures. It proves beneficial to allocate time for preparing requisite documentation beforehand and acquainting yourself with the forthcoming process.

Below is a concise guide delineating uncomplicated stages to initiate a no-money trucking company venture.

Decide what type of trucking business you want to start

The first step to starting a trucking business with no money is to decide what kind of business you want to create. Three types of trucking businesses exist private, for-hire, and standard.

• Private carriers are trucking businesses that transport goods for their company or a specific customer. For example, Walmart has a truck fleet that delivers products from its warehouses to stores. While private carriers are not required to secure operating authority from the Federal Motor Carrier Safety Administration (FMCSA), they are still obligated to adhere to safety and insurance regulations.
• For-hire carriers are trucking businesses that transport goods for anyone who pays them. For example, FedEx and UPS are for-hire carriers that deliver packages for various customers. For-hire carriers must acquire operating authority from the FMCSA when they run across state lines or transport regulated commodities like hazardous materials.
• Common carriers are a subset of for-hire carriers that offer their services to the general public. For example, Greyhound is a common carrier that transports passengers by bus. Common carriers need to obtain operating authority from the FMCSA and follow specific rates, routes, and liability rules.

The type of trucking business you choose will affect your startup costs, revenue potential, and legal obligations. You should do market research and find out what services are in demand in your area and what kind of competition you will face.

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Get your Trucking Authority and Other Legal Requirements

The second step to starting a trucking business with no money is to get your trucking authority and other legal requirements. Depending on the type of trucking business you choose and the state where you operate, you may need to obtain various permits, licenses, registrations, and certifications.

Some of the most common legal requirements for trucking businesses are:

• USDOT Number: A unique identification number issued by the FMCSA that allows you to operate as a commercial motor carrier in the U.S. Applying for a USDOT Number can be completed online via the Unified Registration System.
• MC Number: A unique identification number issued by the FMCSA that grants you operating authority as a for-hire or common carrier. You can apply for an MC Number online through the Unified Registration System.
• IRP: The International Registration Plan is a registration agreement among U.S. states and Canadian provinces that allows you to register your vehicles in one state and operate in multiple jurisdictions. You can apply for IRP through your state’s Department of Motor Vehicles or equivalent agency.
• IFTA: The International Fuel Tax Agreement is a tax collection agreement between U.S. states and Canadian provinces. It streamlines the reporting and payment of fuel taxes for interstate motor carriers. You can apply for IFTA through your state’s Department of Revenue or equivalent agency.
• BOC-3: A form that designates a process agent in each state where you operate who can receive legal documents on your behalf. You can file a BOC-3 form online through a third-party service provider.
• UCR: The Unified Carrier Registration is a fee-based registration program that funds state motor carrier safety programs. You can register for UCR online through the [UCR National Registration System].

These are some of the most common legal requirements for trucking businesses, but there may be others, depending on your situation. You should consult with a lawyer or a professional trucking association to ensure you comply with all the applicable laws and regulations.

Find Financing Options for your Trucking Business

The third step to starting a trucking business with no money is to find financing options for your trucking business. Even if you have no money, you still need some capital to buy or lease trucks and pay for fuel, maintenance, insurance, and other expenses.

There are various financing options available for trucking businesses, such as:

• Commercial truck loans allow you to purchase new or used trucks and equipment. Commercial truck loans are secured by the underlying trucks and equipment, which means you don’t need to provide any other collateral. However, you still need good credit and a steady income to qualify for commercial truck loans. Commercial truck loans from banks, credit unions, online lenders, and dealerships can be found.
• Equipment leasing: This is an alternative to buying trucks and equipment outright. Equipment leasing allows you to rent trucks and equipment from a leasing company for a fixed period and pay a monthly fee. Equipment leasing has advantages over buying, such as lower upfront costs, tax benefits, and flexibility. However, equipment leasing has disadvantages, such as higher long-term costs, limited customization, and maintenance responsibilities.
• Invoice factoring: By opting for this financing avenue, you can sell your unpaid invoices to a factoring company and promptly receive cash in exchange. Invoice factoring can bolster your cash flow and cover operational expenses without the necessity of awaiting your customers’ payments. However, invoice factoring has some drawbacks, such as fees, losing control over customer relationships, and dependency on the factoring company.
• Business credit cards: These are credit cards that allow you to make purchases and pay bills for your business. Utilizing business credit cards enables you to cultivate your business credit rating, accrue rewards, and access emergency funds. However, business credit cards also have some risks, such as high-interest rates, fees, and penalties.

These are some of the most common financing options for trucking businesses, but there may be others, depending on your situation. You should compare different financing options and find the one that suits your needs and budget.

Lease or Rent Trucks and Equipment

The fourth step to starting a trucking business with no money is to lease or rent trucks and equipment. If you don’t have enough cash or credit to buy trucks and equipment outright, leasing or renting them can be a viable option.

Leasing or renting trucks and equipment can help you save money on upfront costs, maintenance, repairs, and depreciation. You can also choose from various trucks and equipment that suit your needs and preferences.

However, leasing or renting trucks and equipment also has some disadvantages. You may have to pay higher long-term costs, follow strict terms and conditions, and deal with limited availability and customization.

To lease or rent trucks and equipment, you need to find a reliable leasing or rental company that offers competitive rates and terms. Before signing anything, you must also ensure you understand the contract details and obligations.

Some of the things you should consider when leasing or renting trucks and equipment are:

• Lease or rental duration: How long do you need the trucks and equipment? Do you need them for a short-term project or a long-term operation? The lease or rental duration will affect the monthly fee and the contract terms.
• Lease or rental fee: How much do you have to pay for the trucks and equipment per month? Does the cost include maintenance, insurance, taxes, and other charges? The lease or rental fee will affect your cash flow and profitability.
• Lease or rental terms: What are the conditions and restrictions of the lease or rental agreement? Can you modify or terminate the deal if needed? Can you renew or extend the contract if required? The lease or rental terms will affect your flexibility and liability.
• Lease or rental quality: What is the truck and equipment’s condition and performance? Are they new or used? Are they well-maintained and reliable? The lease or rental quality will affect your efficiency and safety.

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Market your Trucking Business and find Customers

The fifth step to starting a trucking business with no money is to market your business and find customers. Without customers, you won’t have any revenue or profit. Therefore, you must promote your trucking business and attract potential customers who need your services.

There are various ways to market your trucking business and find customers, such as:

• Networking: This is one of the most effective ways to market your trucking business and find customers. Networking involves building relationships with other people in the industry who can refer you to potential customers or provide valuable information. You can network with other truckers, brokers, shippers, carriers, associations, and more. You can network online through social media, forums, blogs, and websites, or offline through events, meetings, conferences, and trade shows.
• Advertising: This is another way to market your trucking business and find customers. Advertising involves creating and distributing promotional messages that showcase your trucking business and its benefits. You can advertise online through search engines, social media, email, and websites or offline through flyers, banners, billboards, radio, and TV.
• Referrals: This is a way to market your trucking business and find customers by word-of-mouth. Referrals involve getting recommendations from your existing customers, partners, friends, family, and other contacts who can vouch for your trucking business and its quality. You can encourage referrals by offering incentives, discounts, rewards, or testimonials.
• Cold calling: This is a way to market your trucking business and find customers by directly contacting potential customers who may need your services. Cold calling involves making calls or emailing prospects who have never expressed interest in your trucking business. You can find cold-calling leads from directories, databases, websites, or other sources.
• Bidding: This is a way to market your trucking business and find customers by competing for contracts or projects that require your services. Bidding involves submitting proposals or quotes that outline your trucking business and its rates, terms, and conditions. You can find bidding opportunities from online platforms, brokers, shippers, government agencies, or other sources.

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Conclusion

These are some ways to market your trucking business and find customers, but others may depend on your situation. Try different marketing strategies and find the ones that work best for you.

Frequently Asked Question