Buying First Semi

Can anyone help guide me I want to become an owner operator i have money saved up I want to put money down to buy a used truck from a dealer but I have bad credit and Im also learning you have to have atleast 2 years to be approved I'd that true comments please

Arthur, I've owned as many as six trucks at one time. Being an owner operator is really tough. I make really great money these days as a company driver, and I don't have all those headaches and monumental bills that come with the territory of truck ownership.

Yes, any body who is going to be willing to finance a truck to you is going to want to see some good solid experience. Here is why: They have had to re-possess a lot of trucks from guys who simply could not make it all come out so that they could produce enough cash flow and profit to support themselves as a driver and also make the notes on the truck at the same time.

We really don't get into advice for or against the owner operator choice because it really is a decision based on emotion for most folks, and because of that they get all offended when we try to show them just how tough it is to make it in today's business climate. For what ever reason folks always are convinced that they can really make a ton of money by owning the truck, and we try to get them to question why all these trucking companies are wanting to lease their trucks to drivers instead of just keeping company drivers in them. There is a very real reason why they have figured out that having lease operators in some of those drivers seats is beneficial. Truck ownership is a usually considered a crowning glory by those who have never experienced it, but it can easily become a ball and chain once you realize what a huge commitment you've just made.

I realize that I probably haven't given you enough pause to change your mind, so if you must, you may be able to find some help at OOIDA.com.

At school my instructor shot the numbers on being an O/O just to prove a point. You are not going to make a lot more than a company driver. Overhead is insane.

Here is food for thought. Out of that magnificent cpm you are gonna earn; here is a small sample of costs:

Truck payment, fuel, tires, tolls, basic preventative maintenance (oil changes and what not), insurance (truck and load), insurance (health, dental, vision), lawyer retainer fees, accountant fees, breakdown fund, & broker fees.

Also remember, if you are sitting; you are making nothing!! As a company driver you get paid to sit after so long.

Just good for thought. Take a week and just add up how much fuel you use. Ask the maintenance shop how much tires cost. How much oil changes are. Then go hire an accountant for a day and shoot the numbers. You might as well get used to coming out of pocket for basic services.

Oh and I forgot one thing. TAXES!!! Every 90 days you have to pay Uncle Sam. Take about 30% of your income for that quarter and cut a check. Don't forget state, county, and local taxes if they have income tax. Don't forget your Social Security. You want something to retire on.

As an owner operator who lurks this forum, I would not suggest being an owner op over being a driver to anyone. I have my own reasons for doing it until I can't anymore.

But for your main question in regards to financing. Yes, any legit financial institution will require at least 2 years of financial statements when you are self employed or are looking for a business type loan and show profit which typically in your first year of any business you will show a loss, and that goes for ANY financing. Not just towards business ventures, so think, buying a house or car. It is basically a policy that can not be overlooked even if someone had perfect credit. They won't even bother looking if you don't have the 2 years.

Now there is such a thing as a start up loan through the SBA/participating financial institutions, but you will need to already have outstanding credit, a very VERY detailed business model/plan (prove you can make a profit) and about 2" thick of paperwork, including why you believe you can succeed/are better than your competitors (who are those competitors) and proof of why your business model can/will succeed.

Not that I am intentionally trying to thwart anyone from becoming an owner operator without reason. The two paragraphs above I experienced first hand. When I switched from a sole prop to a partnership that 2 year clock reset. Old school and Patrick make good points but it still doesn't cover everything. The only way I can put it in short form, as an owner op...you have to be prepared to lose everything and then some in the blink of an eye, at any given moment. Which really....there's no way to prepare for that other than to just....know about it. Not sure how much money you have saved up, but I am fairly certain that it is no where near enough. Let say even if that 2 year policy thing didn't exist and you had outstanding credit.

Now this isn't a bash fest, we are just trying to give you a realistic outlook. Good luck to you which ever way you decide to go.

Let me rephrase, I'm not trying to thwart anyone from becoming an owner operator: but here are real reasons to really really think about if it's worth the risk or not (for whomever).