Looking for Commercial Truck Financing? Look Beyond the Rates

Posted July 26, 2017

In 2007 I was introduced to a trucking company in the Chicagoland area. I assisted them with financing the purchase of equipment from an unrelated trucking company. The deal closed successfully and our client acquired assets as well as drivers helping them to grow the business. This was the beginning of a longstanding relationship that would become even more significant in helping them weather financial storms in the years to come.

Initially, the company’s owner was mostly concerned about his interest rate. That was totally understandable, since interest rate is an important factor to consider when borrowing money. But almost always, there is more to a financial transaction than just rate.

The Good Guys

At the time of the acquisition, this company generated about $30 million in revenues. They had a fleet of over 150 trucks and trailers. The owner was a very good operator and ran a tight ship. All of their employees were intensely committed to the business, and they knew how to control costs. They spent their money modestly and wisely. They were “the good guys.”

Storm Brewing

Then came 2009 and the Great Recession. For reasons beyond their control, the company started to experience a decline in revenue, and decline in margins. Cash flow was tight, and he struggled to keep the business afloat. Revenues during the recession fell significantly. Then things got worse…some of his lenders called their loans.

The Relationship Pays Off

It was fortunate that there was a strong relationship in place because CCG was able to assist when other lenders wanted out – of good customers and the trucking industry as a whole. CCG restructured the company’s debt, and streamlined the company’s commercial truck financing portfolio. CCG provided the company with operating capital so they could pay for new plates, which they desperately needed to keep the business operating. We continued to work with the company, and by 2011 everything started to turn around. At this point, the owner came in and bought me lunch, and he thanked me, saying he wouldn’t have a business today if it wasn’t for me and CCG. CCG believed in him when he was going through a difficult time.

Invest in Good People

Why did we invest in this company when other lenders would not? We’re a lender who understands the trucking industry. And we understand people. We invest in good quality companies, with good managers. We appreciate people who are fully invested in what they’re doing. At the company we are discussing, the owner’s wife, as well as their two daughters work in the business. The employees are extremely loyal. When things got rough, one of the managers offered to lend his own money to the company. If I knew nothing else about this company, the loyalty the owner received and the way everyone spoke highly of him are a huge factors in my book. Because when you invest in good people, you’re investing in a successful long-term relationship.

Looking Out for Your Best Interests

Today the company is at $50 million and growing. More importantly the company is now strong enough to weather any future economic downturns. And that brings me to my most important point, and the reason I’m sharing this story. History will repeat itself. Our economy has always been cyclical and there will be another recession in the future. Smaller storms will pop up unexpectedly along the way. Having an established relationship with a commercial truck financing company that knows your business and is willing to invest in your future can mean the difference between long term success and failure.

Want to learn more about how Commercial Credit Group can serve your company’s commercial truck financing needs? Please contact me directly by email or give me a call at 630.718.4650.


Don Pokorny
About
Don
Senior Vice President – Central & West Division