Heathbend Credit explains how a Minot, ND auto repair shop can finance a tow truck, wrecker or rollback: equipment loans and leases, whether a business loan can buy a truck, what paperwork partners want for new and used trucks, and how to judge whether towing will cover the payment.
Can You Buy a Truck With a Business Loan?
Yes. A business can buy a truck with a general business loan, but for a tow truck an equipment loan can fit well. The truck secures the loan, payments run over its working life, and the loan does not use up borrowing the shop may need for parts or payroll.
A term loan makes more sense if the truck is part of a bigger project, such as adding a towing yard or a new building.
Wrecker or Rollback: The Financing Is Similar
Wreckers (hook and wheel-lift) and rollbacks (flatbed carriers) are both financed as equipment. Partners look at the chassis and the body or bed separately: the chassis's make, year and miles, and the bed's maker and condition. Heavy-duty wreckers for trucks and buses can be a larger purchase with a narrower resale market.
How to Finance a Truck for My Business: The Paperwork
- Dealer quote or bill of sale with VIN, year, chassis and body details
- Mileage and, for used trucks, an inspection or service history
- Photos of the truck from all four sides when the seller is a private party
- Proof of insurance arrangements for the truck
- The shop's bank statements and its most recent business tax return
Used tow trucks can be financed. Private sales can be funded too, but partners may want more documentation than for a dealer sale.
Loan or Lease for a Tow Truck
A loan suits a shop that will run the truck for many years. A lease can suit a shop that wants lower payments now or plans to replace the truck on a schedule. Leases with a large residual leave a buyout at the end; read that figure before signing. Tax treatment differs between the two, so ask your accountant.
Will Towing Cover the Payment?
Illustrative only. A shop finances a used rollback for $78,000 with $8,000 down. At a test rate of 11 percent over 60 months, the payment on $70,000 is about $1,522 a month. Add insurance, fuel and the driver's time. If the truck brings in a dozen tows a month plus the repair work those tows feed into the bays, the owner can judge whether it pays for itself, and what happens in a quiet month.
For a shop, the repair work the tows feed into the bays can matter as much as the tow fee. A truck that keeps two extra cars a week in the bays may justify itself on labor and parts alone.
Tow-Capable Repair Shops and the Ward County, ND Count
County Business Patterns counted 56 auto repair and maintenance employers in Ward County, ND in 2023, half of them with fewer than five employees, and 43 in ZIP 58701 (ZBP 2023). For a small shop, a tow truck is a big step. The auto repair page covers lifts, parts stock and fleet accounts, and the Minot, ND page has more county figures. Further reading sits on the blog.
By Heathbend Credit · Updated
