Trucking continues to be a robust sector, weathering global challenges like the COVID-19 pandemic. The surge in demand for goods transportation, fueled by businesses and individuals, puts trucking companies in a key position for growth. If you’ve considered launching a trucking business, there are trucking grants available that can help kickstart your venture.
Understanding Trucking Grants Starting a trucking company without capital? Absolutely. The initial step is securing financing. A “trucking business start-up grant” can help you take care of necessary registrations and acquire the equipment for your initial operations.
You don’t have to start with a large fleet. Grants for truck drivers make it possible to start with just one truck, with further grants available for expansion for owner-operator truck drivers.
Remember that trucking business grants, unlike loans, are essentially financial aid, so there’s no need for repayment. However, they are more challenging to secure than traditional financing methods.
Knowing where to find trucking grants isn’t always straightforward. Those looking to start a new venture in trucking, or entrepreneurs who see potential in the industry often overlook the concept of grants.
Armed with the right information, you’ll discover 9 options below for finding grants to start a trucking company.
See More: Grants to reduce or pay for commercial truck insurance
Small Business Administration (SBA) 8(a) Business Development Program
The SBA is renowned for offering business owners the opportunity to secure government contracts, with a goal to award a minimum of 5% of such contracts to new and small businesses annually.
This program targets entrepreneurs from socially disadvantaged or economically deprived backgrounds. While the application process may be lengthy and paperwork-heavy, these government grants for truck drivers could be a boon if you qualify.
FedEx Small Business Grant Contest
FedEx, a prominent trucking company, conducts the FedEx Small Business Grant Contest, allowing you a chance to win up to $50,000 to start your business.
While the contest isn’t exclusively for truckers, anyone can apply. The process involves narrowing down finalists to a list of 100, with five potential winners. An inspiring story increases your chances of securing one of these grants.
National Association for the Self-Employed (NASE) Growth Grants
NASE is committed to fostering the growth of small businesses nationwide. These grants, worth up to $4,000, can be utilized for activities like hiring, facility expansion, and marketing.
The caveat is that you need to be an NASE member in good standing. It could be worthwhile to join the community and apply for a grant as your business starts to take shape.
Veteran-Owned Business Opportunities
If you’re a military veteran, you might qualify for trucking business grants through the Department of Veterans Affairs.
The department runs a Veteran Entrepreneur Portal that links veterans with grant opportunities tailored for them. If you have a service-related disability, the VA’s VR&E Self-Employment Track offers assistance in fundamental business start-up activities, like crafting your business plan.
U.S. Department of Agriculture (USDA) Rural Business Enterprise Grants
Truckers operating from rural areas can avail special grants from the USDA. You must hail from an eligible area to apply for these grants, which can range from $10,000 to $500,000. Smaller grant requests get precedence, so only apply for what you need.
Check out the USDA website for a comprehensive list of qualifying areas.
Educational Grants
If you’re new to trucking, you’ll need certifications and licenses before operating. Some schools offer grants for those seeking retraining.
The Pell Grant is one such option providing grants to students wishing to attend school. Each grant has specific conditions, such as program length, so ensure you read the guidelines carefully before applying.
Nav Small Business Grant
Nav regularly offers grants and loans to small businesses. The Nav grant program invites small businesses to apply for a grant of up to $10,000.
The process is straightforward: create a free account and share your story on your business’s Facebook page. Similar to the FedEx program, Nav will select small businesses for a grant based on their story and background. A compelling story boosts your chances of securing one of these trucking grants.
The Economic Development Administration (EDA) Grants:
The EDA is part of the U.S. Department of Commerce and offers various grants and funding opportunities to encourage entrepreneurship and innovation in economically distressed regions across the U.S. Although not specifically designed for trucking businesses, these grants can be useful for trucking companies operating in qualifying regions. To apply, you’ll need to follow the specific guidelines for each grant opportunity, which are provided on the EDA’s website. Visit www.eda.gov for more information.
The Rural Business Development Grants (RBDG)
This program is run by the U.S. 9. Department of Agriculture (USDA) and aims to support small businesses in rural areas. Funds can be used for a variety of activities, including business development, training, and technical assistance. This grant could be particularly helpful for trucking businesses based in rural areas looking to expand their services or improve their operations. You can learn more about this grant at www.rd.usda.gov.
Remember, it’s important to thoroughly read the eligibility criteria and application instructions for each grant before applying. And don’t forget to explore other financing options as well, such as loans and investors, to fully fund your trucking business.
Additional Financing Resources for Trucking Businesses
Securing grants for truck drivers can be challenging due to the significant competition, and often, these grants won’t cover all the start-up costs, like equipment purchase or employee hiring.
Most business owners will have to explore other financial resources to launch their business.
SBA Loans
The SBA is an invaluable ally for new business owners. They offer a variety of financial assistance options for truckers ready to start their business, including low-interest loans and generous repayment terms. Their loans also tend to have fewer spending restrictions compared to private lenders.
The SBA’s 7(a) Loan Program is the most common route for entrepreneurs, providing up to $5 million in financing. Furthermore, the SBA guarantees 85% of loans up to $150,000.
This is a great alternative when you can’t find grants for buying a truck.
Fuel Cards
Routine expenses for truckers include fuel and minor vehicle repairs. Fuel cards, or fleet cards, are accepted at most gas stations and garages across the country. You can access rebates over time, and the best fuel cards offer cents on the gallon, with minimal monthly fees. Be sure to research before investing in fuel cards.
Business Loan Matchmakers
Free loan matchmaking services can help you find lenders likely to approve your loan application.
Fill out a single application, and you’ll be matched with businesses that provide the best chance of qualifying for one of their loans. Several services offer this matchmaking service, making it worth trying if you’re seeking a conventional small business loan.
Trucking Business Grant: Right for You?
Considering applying for trucking grants instead of traditional financing? There are many reasons why this path might be worth exploring, but it does have some drawbacks.
If you’re contemplating whether to spend time applying for grants, here’s what you need to know.
No Repayment Necessary
The fact is, many small businesses fail. The risk of failure increases if you’re already repaying debts when you start. Grants don’t require repayment.
As long as you abide by the terms of the trucking business grants, you won’t have to repay a penny, making it worthwhile to apply for a grant when starting.
Multiple Options
There’s an abundance of grants from government and private entities. You have numerous opportunities to qualify for grants. Local options are also worth exploring as your municipality might be keen on helping small businesses.
Grant matchmaking services exist, where you fill in a form and get matched with potential grant opportunities you qualify for.
Rapid Growth
The key to small business survival is rapid growth and expansion. Grants aren’t exclusively for start-ups.
There are many grants for small businesses requiring working capital to expand their operations. Grants allow for rapid growth without accruing additional liabilities, making them highly valuable.
Drawbacks of Trucking Grants
While grants have few disadvantages, the process of securing them can be problematic.
Conventional financing might be a better option for truckers in some cases. Let’s look at the downsides of trucking business grants.
Time-Consuming:
Grant applications require significant time and effort. Both government and private grantors tend to be highly selective about whom they fund. It can take months to learn if you’ve been selected for a grant.
Competitive:
Since grants offer funding that doesn’t require repayment, you’ll be competing against potentially thousands of other businesses for the same grant.
Limitations:
Many grant programs stipulate what you can and cannot spend the money on. These restrictions are often tighter than those associated with conventional financing. Make sure to thoroughly read the terms and conditions.
In most cases, grants won’t cover all your business expenses. Many truckers rely on a combination of personal savings, conventional financing, and grants to secure their first clients and make those initial delivery runs.
It’s worth applying for a small business grant for your new trucking business, but don’t rely on it as the sole source of funding for your start-up.
Are there any grants to reduce commercial truck insurance cost?
There weren’t specific grants available for commercial truck insurance. Commercial truck insurance is typically considered a regular business expense rather than a unique expenditure requiring grant funding.
That said, certain general small business grants may be used toward various operational costs, potentially including insurance. However, it’s important to read the specific stipulations of each grant, as some may restrict the types of expenses that can be covered.
There may be programs that offer discounts or financial assistance for commercial truck insurance to certain groups, such as veterans or minority business owners. It would be beneficial to directly contact insurance providers or industry-specific organizations for up-to-date information.
Commercial truck insurance is a critical aspect of running a successful trucking business. It safeguards your business against liabilities, unforeseen expenses, and potential legal issues, not to mention it’s also required by law. However, the costs associated with obtaining this insurance can sometimes be substantial, which is why it’s essential to find a cost-effective solution. Shopping around with several reputable providers below to compare quotes is the most effective way to find the cheapest commercial truck insurance policy for your trucking business.
Commercial truck insurance costs can vary significantly based on a number of factors such as the type of trucks you operate, the goods you transport, the experience level of your drivers, and the areas you service. On average, for owner-operators who lease their truck to a motor carrier, insurance can range from $2,000 to $4,000 per year. If you’re an owner-operator with authority, the costs can shoot up dramatically to between $8,000 to $14,000 per year, or even more. It’s essential to get a clear understanding of these costs to adequately budget for your business (read more in our detailed guide about Commercial Truck Insurance Cost).
Given the considerable range in costs, it’s crucial to shop around for cheap commercial truck insurance. Doing so doesn’t mean compromising on coverage or quality; instead, it’s about finding the right balance between adequate protection and affordability. Comparing quotes from different providers will give you a broader perspective on what’s available in the market, ensuring you don’t pay more than necessary (explore our tips to find Cheap Commercial Truck Insurance).
But remember, cost should not be your sole determining factor. You also want an insurance provider that offers exceptional service, comprehensive coverage, and excellent claim handling. After all, the best value insurance is the one that gives you peace of mind knowing that your business is protected in the event of an accident (find our top picks in Best Commercial Truck Insurance Companies).
In summary, finding the right commercial truck insurance is a multi-step process that involves understanding your costs, shopping around for affordable rates, and choosing a reputable company that provides comprehensive coverage.
Harnessing Grants for Different Trucking Businesses
The trucking industry is vast and varied, encompassing numerous types of businesses, each with its unique set of challenges and requirements. One common hurdle all these businesses face is securing necessary funding for start-up costs, expansion, or upgrades. Grants offer a lifeline, enabling these businesses to grow and thrive without the burden of repayment.
Box Truck Businesses
Box trucks are versatile vehicles used for various purposes such as moving services, delivery services, and more. As an owner of a box truck business, acquiring newer models, maintaining the fleet, and training drivers can be expensive. The Small Business Innovation Research (SBIR) Program can help with technological upgrades and improvements, enhancing efficiency and safety in your operations. Alternatively, the USDA Rural Business Development Grant can support businesses operating in rural areas, helping to foster growth and employment.
Learn more about how to start a box truck business
Tow Truck Businesses
A tow truck business offers essential services, often operating around the clock to assist stranded motorists and collaborate with law enforcement. Given the heavy wear and tear these vehicles face, regular maintenance and occasional fleet upgrades can lead to high operating costs. The SBIR Program can support in incorporating technological advancements, improving service and efficiency. The StreetShares Veteran Small Business Award could also be beneficial if the business is veteran-owned.
Learn more how to start a tow truck business
Dump Truck Businesses
Dump truck businesses play a crucial role in construction, mining, and waste management sectors. These heavy-duty vehicles require significant investment. The Eileen Fisher Women-Owned Business Grant Program can be a beneficial source of funding for women-owned dump truck businesses. In contrast, the FedEx Small Business Grant Contest offers a unique opportunity for all small businesses, including dump truck businesses, to win valuable funding.
Learn more how to start a dump truck business
Hot Shot Trucking Businesses
Hot shot trucking businesses cater to urgent, time-sensitive deliveries, often of smaller loads. These businesses face unique challenges, including irregular hours and maintaining speedy service. The Amber Grant for Women can help women-owned hot shot trucking businesses, while the FedEx Small Business Grant Contest can support technological advancements to ensure timely deliveries and efficient tracking.
Learn more how to start a hot shot trucking business
In conclusion, many trucking businesses can benefit from grants that cater to different niches and specific needs within the industry. These funding opportunities can alleviate financial pressure and pave the way for growth and innovation in the respective sectors.
Conclusion
Starting a trucking business, like any other enterprise, requires strategic planning and proper financial support. While grants can provide a significant leg-up, understanding all the financing options available to you, such as SBA loans and business loan matchmakers, can make a big difference in your start-up journey. Remember, the goal is to build a sustainable and profitable business over time.
