In light of the last Great Recession, a large amount of financial institutions have tightened their guidelines against the trucking industry. I was not aware of this until I recently tried to finance a newer trailer for my own use. When I started operating under my own authority, I switched my corporate bank accounts over to a bank that was large, but still "friendly" when it came to trucking. It takes a certain amount of "give and take" between one's trucking company and their bank to make a good environment for fleet expansion, should someone want to grow their fleet over time.
Receiving an instant pre-approval when inquiring to my bank for trailer financing should have meant a nice smooth transaction. Instead, unbeknownst to me, it would be the start of a tedious process ending in my switching of banks for all of my corporate accounts all together.
Upon picking a trailer and sending the application for final processing by the underwriters, a week and a half run around began involving the underwriters, the loan officers, and myself. Knowing my credit was not an issue and that I was even willing to put a down payment if necessary, I began to get annoyed when I could not get a straight answer from my local branch. I decided it was time to kick it up a notch!
After contacting the regional manager I was finally able to get a straight answer, although it was far from what I had expected to hear. He explained to me that their large financial institution had decided across the board, that trucking in the form of a small business was a "prohibited industry" for lending money to. He explained that due to the rate of default compiled with the hit banks took from the downturn during the last recession from our industry, their underwriting guidelines were changed recently to reflect trucking as too high a risk industry to lend money to in a small business capacity.
This turning away by the bank where all of my money flows through has definitely left a bad taste in my mouth. Being forced to go through more industry specific lenders has not only inconvenienced me to have to find another lender willing to take on a small business loan, but also will affect the interest rate on this loan, since industry specific lenders are usually substantially higher (regardless of credit worthiness) than larger banks.
Choosing a business bank should be carefully done, since this relationship is one of great trust and should create a mutually beneficial relationship. Bylaws, fees, and lending practices of your financial institution should periodically be monitored for change as well. My bank was not always against trucking, but adapted to be so after obviously taking losses from the industry.
A place where you channel your business funds through should be willing to take into consideration your individual financial history and creditworthiness as a measure of risk, instead of laying a blanket over your general industry and creating a roadblock for potential success. Personally, I will be moving to a smaller credit union that looks at my business in a different light than that of larger corporate institutions. Be sure when the time comes to expand or improve, you choose a partner that will throw you out a ladder to climb and not one that drops an anvil on your head instead!