Glossary · Trucking Finance
Equipment Loan.
Term loan secured by the financed vehicle (truck, trailer, or other equipment); standard structure for buying Class 8 tractors and trailers.
What it is
An equipment loan is a term loan secured by the equipment being financed. The lender holds a lien on the title until the loan is paid off and releases it on payoff. Equipment loans are the standard structure for purchasing Class 8 tractors, dry vans, reefers, flatbeds, lift gates, APUs, and other trucking-specific assets.
Terms typically run 24–84 months for tractors and 36–60 months for trailers. APR observed on the Dispatched panel runs 9–18% depending on credit, revenue history, equipment age, and down payment. Down payment is typically 10–20% of purchase price, with zero-down programs available to carriers with strong credit and revenue history. The lender appraises the equipment before funding and will not finance over-market sticker prices — the loan amount is capped at the appraised value, regardless of what the dealer is asking. Used equipment, particularly tractors over 7 years old or with high mileage, faces shorter terms and higher rates.
Why it matters for trucking finance
Equipment loans are how owner-operators build equity in their trucks. Every payment increases ownership, unlike lease-purchase where equity is contingent on completing the contract. APR depends on credit, revenue history, down payment, and equipment age. Longer terms lower the monthly payment but increase total interest paid. Equipment refinancing — taking equity out of a paid-down truck — is sometimes used as cheaper working capital than an MCA or unsecured short-term loan.
Related terms
- Term Loan — Lump-sum business loan repaid over a fixed schedule with interest; the standard structure for equipment purchases and major capital expenditures.
- Balloon Payment — Large lump-sum payment due at the end of a loan term, with smaller monthly payments throughout the term; common in equipment financing.
- Working Capital — Short-term unsecured business funding used to bridge cash-flow gaps, cover operating expenses, or capitalize on opportunities; APR typically 14–34%.
Related Dispatched products
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The vocabulary above is the upper-funnel layer. If you are ready to move on financing, factoring, or insurance, start the matching flow — soft pull, no credit impact to begin.