How to Start a Trucking Company From Start to Finish

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How to Start a Trucking Company

Launch a Trucking Company, Even When You Have No Money

A trucking company is a lucrative venture that requires a substantial amount of startup funding. And, while many people would like to get into it, they have no idea where to start — especially when they have no money to launch.

Here, you’ll learn everything you need to start a trucking company, even when your initial resources are limited. 

  • Projected startup costs based on the number of trucks
  • A step-by-step action plan for getting off the ground
  • How to raise funding when starting from ground zero

Now, let’s look at what it takes and you can decide if you still want to start a trucking company (It’s not for the faint of heart, but you can learn how to maximize your resources). 

How Much Does it Cost to Start a Trucking Company? 

Depending on the number of trucks you want on the road, where you plan for them to drive, and the other personalized details of your business, it can cost a minimum of $27,357 to $406,979 to launch a trucking company.  

How Much Does it Cost to Start a Trucking Company
*An LLC is probably a more cautious business structure choice for a trucking company but is more expensive. For the purpose of showing minimum costs, I’ve included a typical sole proprietorship cost. 
**Single BOC-3 filing cost is minimum for an intrastate operation. 
***Fuel tax cost based on 12,000 miles per truck, the average long-haul truck fuel economy of 5.5 miles per gallon,  at the national average IFTA tax of $0.5538 per gallon (PFS). 
****Based on the average US diesel price of $2.956 (EIA), the average long-haul truck fuel economy of 5.5 miles per gallon (ICCT), and 12,000 miles of driving.
*****Based on average US annual truck driver salary of $46,380 (BLS). 

Of course, these costs can vary wildly based on many different factors. So, you’ll need a budget and a plan. Hopefully, that’s where I can help. Step-by-step, I’ve outlined how to start a small trucking company, even if you have no money to put down. 

Before We Start, Let’s Get an Overview of Your Plan

You’ll need to ask yourself a few crucial questions before you get started. Don’t worry, though. They’re easy to answer and you can always change your mind later as your company grows. 

Where will you base your operations and where will you haul? 

Your base location and the states you will drive through are crucial to know before you launch. If you will never leave your state, you can get by without some of the licensing and costs associated with hauling across state lines. 

For example, with interstate freight, hauling across state lines, you will need motor carrier authority or an MC number, which we’ll cover later. And, for intrastate freight, hauling only within your base state, there are typically fewer requirements. 

So, if your operations are isolated to your home state, you can skip over the MC number section for now. You can acquire authority later if you choose to expand your operations. 

Will you drive for your company? 

If you plan to drive for your trucking company you will need more licensing. For a one-truck operation, driving could save you on the cost of an employee salary or payment to a contractor. However, you will need a commercial driver’s license (CDL), which takes some work.

While a trucking company owner is not required to maintain a CDL, each driver is. This type of license can be acquired through your state DMV, and each of your drivers is required to keep a valid, updated CDL at all times. 

Will you hire or contract your drivers?

While there is no rule to how you set up your operations, you need to consider whether you would rather hire employees or work with contractors. Either way, one of the most difficult parts of your job, when you try to scale your business, will be to build and maintain relationships with drivers who are qualified. 

Look for drivers with the following qualities: 

  • Licensed 
  • Punctual
  • Good temperament
  • Careful with equipment

The paperwork associated with contractors will typically come with less hassle than employees. Yet, the potential to provide benefits to employees can sometimes nurture ongoing and profitable relationships. 

Now, let’s look at the steps you need to take to start a trucking company. 

Step 1: Acquire a Business License

The first step to take is to acquire your business license. And, you will have options. 

In the US, there are four types of business structures/entities to choose from. 

  1. Sole proprietorship – an unincorporated business owned by one person who has sole rights to business profits and liabilities. 
  2. Partnership – an unincorporated business owned by two or more people who share equal rights and responsibilities to business profits and liabilities. 
  3. Limited Liability Company (LLC) – a business that includes elements of a sole proprietorship, partnership, and corporation in which the owners are not personally liable for the company’s debts or liabilities. 
  4. Corporation – a business that is legally separate and distinct from its owners who act as representatives for the company. A corporation’s owners are not personally liable for the company’s debts or liabilities. 

I usually suggest that trucking companies go with an LLC because it gives business owners many of the same protections of a corporation with the ease of a sole proprietorship or partnership. You may be able to have your licensing fees paid by leveraging an economic development grant. 

To acquire business licensing, go to your state’s Secretary of State website for more information.

Resources: 

Step 2: Get Your Commercial Driver’s License (CDL)

If you will be driving, you will need to obtain a CDL, which is a required license for anyone driving commercial vehicles like tractor-trailers, semi-trucks, dump trucks, and passenger buses. 

To obtain a CDL requires education, exams, and fees. There are some states that will allow you to obtain a CDL without schooling, but you will still need to pass an exam.

The courses offered are often 5-7 days and sometimes 60-90 days. The longer courses can cost upwards of $1,200, but you can get these courses paid for in a couple of different ways. 

  1. Apply for an education grant through the federal government.
  2. Get a trucking company to train you in exchange for a contract to work for them for a certain number of months at a low compensation.

So, be sure to check into the financial aid programs offered by your local community college and trucking companies in your state to obtain a CDL. 

Resources: 

Step 3: Apply for an Employer Identification Number (EIN)

After your business is licensed, you’ll need to apply for an Employee Identification Number (EIN). An EIN is a free, nine-digit federal identification number assigned by the IRS for business taxes and reporting. 

Your EIN will be used to file taxes, report business income and expenses, and apply for and establish credit on behalf of your company.

Resource: IRS Free Online EIN Application 

Step 4: Sign Up for a DUNS™ Number

A DUNS™ or D&B number is a free, nine-digit business identification number assigned by Dun & Bradstreet’s business credit reporting agency to establish your company’s credit profile.

Your DUNS™ number will be used to apply for and establish credit on behalf of your company.  

Resources: 

Step 5: Hack Your Business Credit Profile

Funded businesses achieve 2X more employment growth and 30% more revenue growth than businesses that do not have adequate capital at launch, according to Kauffman. When you learn how to hack your business credit profile, you can obtain up to $100K in funding in as quickly as a month. 

Brendan Purnell, A2B Trucking LLC

Personal credit is limited and cash flow is a gamble. Make sure you have adequate capital because, in the blink of an eye, you can go belly-up if you are under-capitalized.

– Brendan Purnell

Brendan Purnell, the owner of A2B Trucking in Snellville, Georgia, was able to obtain over $200K in business credit over the course of six months. The financing he obtained substantially impacted the vitality of his company. 

He’s now operating a business with 10 trucks and a team of 12, including 10 contracted drivers, Purnell’s fiance doing administrative work, and himself. And, A2B is in a position to let others lease into the trucking company for a period of months to learn the ropes. 

A strong credit profile isn’t the same thing as bad debt. And, if you’re serious about building a successful company, more capital can help you achieve your goals. 

Resources: 

Step 6: Obtain Your Equipment 

Once business credit is established, you can start truck shopping. Even if you aren’t in a position to qualify for a vehicle loan, there may be other ways to do so. 

For example, you may be able to purchase a used truck (very inexpensively) on eBay with a credit card. 

Buy a used semi truck on eBay

While it’s less likely that you’ll actually be able to drive something that costs nothing, you never know what you might find for free on Craigslist. 

Free semi truck on Craigslist

But, while these options are available, I wouldn’t necessarily recommend them. Your trucks should be a long-term investment. I’ve heard a rumor that there were hundreds of trucking companies that went under last year. So, it may be the perfect time to get a rig at liquidation prices. 

Once your business credit is established and you can look more closely at your resources, you’ll be able to make more informed and personalized decisions about how to buy fleet. 

Resource: 5 Tips for New Owner Operators Buying Your First Truck

Step 7: Acquire USDOT & MC Numbers

Next, you will need your USDOT and/or MC numbers issued. 

A USDOT or DOT number is a license number required for all commercial vehicles that weigh a certain amount, transport people or property, and operate between state lines. A DOT number is free. 

An MC number is a license that enables trucking companies to legally carry regulated commodities (anything that has been changed from its natural state) across state lines. An MC number is $300. If you need help paying for the license, an economic development grant may help cover the cost. 

Both licenses are issued by and can be obtained from the Federal Motor Carrier Safety Administration (FMCSA). 

Resource: FMCSA Registration Wizard

Step 8: Activate Your MC Authority

After registering with FMCSA for your DOT and MC numbers, you will need to activate your authority. This requires two parts

  1. Submit Proof of Liability Insurance – proof of commercial auto insurance coverage needed within 90-days of applying for MC authority. 
  2. BOC-3 Filing – designates processing agents to act on behalf of your processing company in each state in which you will operate. 

A processing agent is a person who can receive legal documents for your company in the case of a lawsuit. The cost for the BOC-3 filing starts at about $20. Depending on the agent, you may be able to bypass the cost. Ask your agent if their service has any type of fee waivers. 

Resource: FMCSA Process Agent Directory

Step 9: Get Cargo Insurance 

Cargo insurance provides coverage for freight. While you are not legally required to maintain cargo insurance, it will be required by most brokers and shippers. You will need to submit proof that you carry this type of coverage before you can get hired to haul. 

As with all types of insurance, you should get multiple quotes for cargo coverage and choose the best option. If you already know the brokers and shippers you will work with, ask for recommendations from them and find out what their coverage requirements are.  

Resource: Cargo Insurance: What is it, What are the Types, and Do I Need it? 

Step 10: Obtain Your Unified Carrier Registration (UCR) 

A UCR is a required federal directory of carriers, that replaced the Single State Registration System (SSRS). The collected fees are used to support state safety training and USDOT officer training. 

Any trucking company with interstate operations must register, even if based in a state that does not participate. Non-Participating states include Arizona, Florida, Hawaii, Maryland, Nevada, New Jersey, Oregon, Vermont, Wyoming, and the District of Columbia.

Fees start at $60 for a company with up to two trucks, plus a $75 application fee. For help paying your UCR fees, an economic development grant may help you out. 

Resource: UCR Online Registration

Step 11: Apply for Apportioned License Plates 

Apportioned license plates distribute licensing fees equally between each state a truck passes through. And, they are required for all commercial vehicles that travel between states and weigh 26,000 lbs or more. 

Apportioned License Plates
Apportioned Oregon License Plate from 2018

Apportioned plates are governed by the International Registration Plan Organization (IRP). And, you can obtain more information about getting your plate(s) on the IRP website. 

Resource: IRP Organization’s Website 

Step 12: Register for Your Quarterly Fuel Taxes 

IFTA Decal
IFTA Decal from 2013

Your quarterly fuel taxes are dictated by the International Fuel Tax Agreement (IFTA) and the International Fuel Tax Association. You will need to register with and order decals from your state agency that administers IFTA regulations. All trucks must have an updated IFTA decal to be in compliance. 

Resource: US State Website Directory 

Step 13: Research Other State-Specific Registrations

Do the research within your state and find out which state-specific registrations may be required. For example, depending on where you are located, you may need to apply for intrastate authority. And, Kentucky, New Mexico, New York, and Oregon require a weight-distance tax. Contact your local DMV or state department for more information. 

Final Thoughts

Now that you have the process outlined, you’re ready to launch. Just start networking to find your next job or driver and get on the road! And, if you need help getting financed from zero, find out how to get $100K in business credit without walking into a bank.

We Studied Suntrust Business Credit Cards & Here’s What We Found…

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Suntrust Business Credit Card Review

When you build business credit, you need to be in the know about all of your options. And, if you’re an existing Suntrust Bank member, you’ve probably wondered about the brands’ business credit cards. If you’re not, you may have seen mention of Suntrust’s cash rewards cards online. Get all of your questions answered here. 

First, you can learn about Suntrust Bank and see a summary of each business card they offer. Then, see a thorough exploration of both cards. And, finally, read answers to some of the most frequently asked questions. When you’re finished reading, you should be able to determine if a Suntrust business credit card is right for you.  

What is Suntrust Bank (Soon to be Trusit)? 

Suntrust Bank is a trusted financial institution with 1,400+ branches across the United States. The bank is currently undergoing a merger with BB&T, which will result in a new brand: Truist. 

Both existing brands have disclosed that members should continue banking as usual. They promise to make the transition seamless for their members. And, new credit applications should be processed as usual. 

What is a Suntrust Business Credit Card? 

Suntrust business credit cards are popular funding options for companies interested in building their credit or accessing multiple lines of credit for working capital/investments. The brand offers a cash rewards card for businesses and a card designed specifically for non-profits. 

  • Suntrust business credit card rewards include cash back, loyalty cash, automatic rebates, and flexible spending. 
  • And, non-profit cardholders can leverage rebates on eligible spending. 

Suntrust Business Credit Cards Comparison

Now, let’s take a look at a summary of the advantages of business credit cards available through Suntrust Bank.

What do Suntrust’s Business Cards Have in Common? 

First of all, Suntrust credit cards for businesses and non-profits have a 0% introductory rate for the first 12 months with no annual fee. So, if you have your card paid off within the first year, you won’t owe additional costs for the funding. 

Next, both cards offer the benefits of the Mastercard EasySavings® Program. Through this program, you can leverage notable savings for your business on hotels, restaurants, travel, business services, fuel, and maintenance partners. Earn a 4% rebate on spending at more than 18K restaurants and 5K hotels worldwide. 

Furthermore, both cards offer Zero Liability, which protects cardholders from unauthorized transactions.  

Exclusive Suntrust Business Credit Card Rewards 

The business credit card offers exclusive cash rewards. Cardholders can redeem cash rewards earned in the form of cash deposits into your checking or savings accounts or redeem toward a statement credit. Alternatively, you can opt to use your rewards to purchase gift cards, merchandise, or travel. 

And, Suntrust rewards do not expire, as long as your account/credit line is open. And, there is no spending limit. So, you can let your rewards build as long as you like before you redeem. However, rewards earned prior to 2012 will expire five years from the date they were earned.  

For the first 12 months after opening your account, you will receive 5% cash back on each qualifying purchase for the first $2,000 spent each billing period. After the first year, you will continue to earn 3% cash rewards on eligible spending. And, Purchases made outside of Suntrust’s partner network will earn 1% cash back.

So, with a Suntrust business card, you’ll earn 1-5% cash back on purchases that you can redeem at any time. 

Wait.. there’s more. Suntrust banking customers can leverage added benefits from this card. When you deposit your cash rewards into a Suntrust checking or savings account, you can get an additional 10-25% bonus. 

If you deposit $100 in cash rewards into your Suntrust business checking, savings, or money market account, your actual earnings will total $110. And, if you deposit $100 in rewards into a SunTrust Business Advantage Plus Demand Deposit Account (DDA), you’ll earn $125 in all. 

This credit card provides the most benefit for existing Suntrust banking members who use their card often. 

Unfortunately, the non-profit card doesn’t come with the same rewards as the business card. But, the interest rate on the card is competitive and users can take advantage of Mastercard’s EasySavings® program. 

Suntrust Business Credit Card Requirements:

What credit score do you need to get a Suntrust credit card? Well, it better be excellent. After checking in with MyFico forums, it looks like Suntrust only extends credit to businesses with an Equifax FICO 8 score above 700. 

And, when cardholders use their card responsibly, their credit limit seems to go up after about a year with the company. 

How does the Suntrust Credit Program Work? 

Here are some more details about what you should expect from the Suntrust credit program, should you be approved for the business card. 

Does Suntrust charge for a cash advance? 

Yes, as with most credit cards, Suntrust offers cash advances for a fee. Initially, when your credit line is approved through Suntrust, you will be assigned a cash advance limit. Your advance limit may or may not fluctuate with your card’s spending limit. 

And, according to the card’s terms and conditions, the initial fee will be the greater of $5 or 3% of the amount of the advance. And, the APR on a cash advance, which will begin to accrue immediately, will be 24.74%. 

So, upfront, on a $500 cash advance, you will pay $15. Then, you’ll owe interest on the amount until the total is paid. 

What is the typical APR for a business credit card with Suntrust? 

As of January 2020 and also according to the card’s terms and conditions, you can expect your interest rate to vary. The annual interest rate that will kick in after your promotional spending period will be between 13.74 and 20.74%. 

According to the Bureau of Consumer Financial Protection, in an updated report published last year, the average credit card annual percentage rate (APR) for private label credit cards is 26.4%, so the Suntrust offer is competitive. 

How often can you ask for a credit line increase on a Suntrust business credit card?

Suntrust offers most Suntrust business card holders a spending limit increase after about a year of responsible payment activity. So, you can wait for the 12-month mark, or you can take matters into your own hands at any time by calling Suntrust’s customer service department and requesting one. 

What is a Suntrust promo code? 

From time to time, Suntrust will offer members exclusive promotional bonuses — for example, “Earn $200 when you open a new checking account.” 

These promo codes may be sent out via email and are sometimes available on the Suntrust Bank website. To leverage a promo code, you can use the code online when you take advantage of the offer or take the code into a branch with you. 

Related Answers

Does Suntrust have credit cards/does Suntrust offer credit?

Yes. Suntrust Bank (soon to be Truist) offers credit for both individuals and businesses to leverage. 

How much does it cost to open a Suntrust account?

A Suntrust checking account is free to open, but a $100 minimum deposit is required. Your $7 Monthly maintenance fee can be waived with eligible account activity and for students for up to 5 years. 

Is Suntrust Bank going out of business?

No, Suntrust Bank is a trusted financial institution with 1400+ branches across the United States. The idea that they are going out of business comes from the company’s current merger with BB&T.

How do I increase my credit limit with Suntrust?

Suntrust will automatically increase your credit limit with responsible payment activity. To manually request a credit increase, call 1-800-477-9702.

Can I pay my Suntrust credit card online?

Yes. Suntrust offers online expense management tools including online credit card payments. 

What is Suntrust bill pay?

Suntrust bill pay is an online bill payment solution that Suntrust Bank offers their members as a convenience. 

How does Suntrust cash back work?

When you use your Suntrust cash rewards card to make purchases, you can redeem earned rewards by depositing into you checking or savings account or using them to apply toward statement credit. 

How do you redeem Suntrust rewards?

Login to your Suntrust rewards account and find the ‘Cash’ tab in the navigation menu. Then, select your method of redemption. Choose the amount of rewards you would like to redeem. Your rewards will be automatically added to the account you have selected. 

Do Suntrust cash rewards expire?

No, Suntrust cash rewards do not expire as long as your account is open. 

Final Thoughts

Suntrust offers a great business credit card with a 0% promotional interest rate that lasts 12 months. Thereafter, the APR is competitive. The cashback rewards during this period are impressive. And, Suntrust Bank members can take advantage of even more business savings. All in all, when you’re building business credit, this is an excellent card to aim for. 

If you want to build your business credit profile and access more small business lines of credit without high origination fees, start here: learn how to obtain business credit in 30 days.

Is Dell Business Credit Worth Your Time?

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Is Dell Business Credit Worth Your Time?

When you’re a Dell-lover looking to build your credit profile and in need of a new computer, in-house financing is a natural place to turn. You can get upfront funding for your new equipment and potentially boost your scores. But, is the program worth your time? Read this Dell business credit review, and answer that question yourself. 

First of all, What is Dell Business Credit? 

Dell business credit is one of three business financing packages offered by Dell to fund the purchase of its PCs, electronics, and accessories. The business credit program is controlled by WebBank, who also partners with companies like Avant, Lending Club, Fingerhut, and PayPal to offer financial services to these brands’ existing customers.   

Dell Business Credit Offers Promotional Pricing on Specific Equipment

Financing can only be used to purchase directly through Dell and the brand offers promotions on specific equipment. 90-day, 0% interest is a popular example. 

The three financing options offered by Dell are: 

  • PC as a service
  • Dell business credit
  • Lease options

In addition, Dell offers custom solutions for enterprise solutions for medium and large businesses. So, larger companies can reach out with their needs to come up with packages under the pretense of greater savings on bigger orders. 

At first glance, the program looks fine. Yet, Dell’s business financing reviews online seem to deliver more than the usual amount of complaints. So, I decided to dig into the program and share unbiased facts. After reading through, you should be able to decide if the program is worth your time. 

Next, How Difficult is it to Get Dell Business Credit and Will You Qualify? 

Borrowers who apply for Dell business credit are often surprised by the approval process and credit amount. For example, one business applicant who made $62K in purchases from Dell the previous month was offered a $5K tradeline (MyFico). The amount of funding led this user to the conclusion that WebBank, the actual lender, doesn’t factor customer metrics within the Dell company into its decision. 

While this seems a bit wonky and impersonal, Dell did allegedly finance another customer for the same $5K business credit with no social security number and after locking their reports (MyFico). This possibility is appealing because it means that you could potentially qualify for a tradeline without sharing your personal credit report and conceivably start building business credit.

So, if WebBank will qualify an applicant for $5K in credit with no credit history, how easy is it to get a Dell business credit card? 

According to WallettHub, WebBank’s cards, including the Dell Preferred Account (which is not the same as the business credit card) are subject to approval with personal credit scores of 640 and up. So, while all situations are different, it’s a fair assumption to make that it is pretty easy to qualify. 

And, What Business Credit Report Does Dell Pull? 

If you have a fair business credit history with one bureau and bad credit on another, you need to make sure your lender will look at the report with the more favorable score. So, which report will Dell/WebBank peek in at when qualifying you for approval? According to multiple borrowers, you’ll see a hard pull on your Experian report when you apply for a Dell business account. 

Then, Why all the Poor Reviews? 

Let’s take a look at the common complaints about this card from existing borrowers. 

  • High interest
  • Poor customer service
  • High interest
  • High interest
  • Lack of payment technology
  • High interest

Many of Dell’s borrowers complain about the fact that they still owe the full amount of their equipment after making payments, sometimes for years. And, they express that there was no explanation that if their account wasn’t paid in full before the promotional no-interest period, that they would be charged the full interest amount. 

Yes, the above is frustrating, but these payment conditions were in the terms and conditions laid out by Dell and WebBank. It’s just that the borrowers didn’t see or understand them. 

You should always expect to pay interest on purchases made during a promotional 0% interest financing period if your balance is not paid in full before the end of the period. 

So, is Dell Business Credit Worth Your Time? 

If you need Dell equipment, should you go straight to the source for funding? — This is the wrong question. Instead, ask yourself the following: 

  • What are Dell’s current business credit promotions? 
  • If I leverage these promotions, can I save money on the equipment I need (the promotions often offer 15% price discounts on products)? 
  • If I leverage these promotions, will I be able to pay off my card within the promotional period to prevent future interest spikes? 

If you need Dell equipment and you can afford to pay off your purchase within 90-days, there’s no reason not to take advantage of the financial services. In fact, you could see a bump in your credit scores for on-time payments. 

Related Answers

Does Dell have financing?

Yes, Dell offers several consumer and business financing solutions through WebBank for the purchase of its equipment and accessories. 

What credit score is needed for Dell financing?

According to WalletHub, WebBank, who controls Dell’s financing options, qualifies borrowers with credit scores of 640+

What business credit report does Dell pull?

When applying for Dell business credit, your Experian report will be pulled. 

Does Dell finance bad credit?

According to many borrowers, Dell credit is fairly easy to qualify for, but typically, lenders do not finance anyone with bad credit. 

Can I buy a laptop and pay monthly?

Yes! You can leverage financing directly through most laptop manufacturers as tradelines or use alternative funding options to make monthly payments on a new laptop. 

Can I lease a laptop?

Yes! Most major laptop manufacturers have lease options for businesses and consumers. Dell’s progressive leasing is one example. 

Final Thoughts

Dell business credit offers no major rewards — this type of financing doesn’t allow you to generate points, airline miles, or cash awards. But, for businesses early in the credit building journey, if leveraged properly, Dell’s in-house financing can be helpful. Learn how to make the most of your credit profile. Start by understanding how to use 30-day net vendors to boost your business credit score.

Should You Open a Navy Federal Credit Union Business Account?

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Navy Federal Credit Union Review

Navy Federal Credit Union Business Solutions Review

If you’ve been in the military or you have a family member or friend who has, you’ve presumably heard of Navy Federal Credit Union. And, you probably already know that it’s a great organization. But, did you know that you don’t have to be active in the military to become a member? And, did you know you can open a business account to leverage the perks for your company?

It’s true. There are quite a few benefits your business can take advantage of with Navy Federal. In this Navy Federal business account review, you’ll find a summary of them. Read on to decide if a Business Solutions account is right for you. 

What is the Navy Federal Credit Union? 

Navy Federal Credit Union is an NCUA-insured financial institution exclusively operated for the military and their families. To qualify for membership, you or one of your family or household members must have ties to the armed forces, DoD, or National Guard.

And, What are the Benefits of a Navy Federal Membership? 

The institution offers powerful financial products and services with low rates, fees, and charges as well as convenient banking and home buying. Members can take advantage of exclusive special offers and discounts from various partners. 

Here are the Navy Federal Credit Union’s exclusive member partners and programs. 

  • Visa – Access discounts of up to 15% for card use with select retailers.
  • Geico – Leverage member discounts on auto insurance. 
  • RealtyPlus – Receive $4K to $8K cashback on a home purchase. 
  • Enterprise Rent-A-Car – Get elite member discounts off everyday low rates.
  • Hertz Rent-A-Car – Save up to 20% off car rentals. 
  • Auto Buying Program – Experience a hassle-free vehicle purchase process and exclusive savings.

Furthermore, Navy Federal is a portfolio lender, which means that they lend their own money. Because they’ve cut out the middle man, they are able to offer lower rates on loans and lines of credit than most lenders. So, this is a valuable company for a small business in need of banking or lending to work with. 

What Financial Services Can You Access with a Navy Federal Business Account? 

Business Solutions by Navy Federal is centered on delivering the most beneficial financial tools and resources available to small business members. What products and services can you leverage to help you meet your company goals? 

The program for qualified members with military ties offers several financial services for small businesses including loans, lines of credit, checking, and savings accounts. Learn more about each of them below. 

Business Loans

Navy Federal Credit Union business loans can help you improve business cash flow. Leverage real estate, vehicle, and term loans with low rates and fees. 

Real estate loans taken from the credit union can help you purchase residential rental properties, commercial real estate, multi-family dwellings, or pay for a property renovation. Pay for a new purchase, refinance, or remodel an existing building. 

Loan to value on real estate loans through Navy Federal ranges from 65% (remodel) to 80% (new purchase). There are fixed and variable rate options. And, you’ll experience no prepayment penalties. 

Vehicle and term loans give you access to permanent working capital, equipment, company cars, heavy-duty trucks, and more. Purchase or refinance your auto or equipment. Loan to value on these loans is 75% and there are no prepayment penalties. 

Business Lines of Credit

Navy Federal business credit card can elevate your business’ purchasing power. Apply for a Visa™ or MasterCard™ and pay an APR as low as the prime rate +5.9% with no annual fee. Earn Business Rewards of one point per $1 spent and redeem them for airline tickets and more. 

Navy Federal Credit Union Business Solutions Credit Cards

Here’s a taste of what you can earn through Navy Federal’s Business Rewards card.

  • Redeem 5K points for a $50 BestBuy gift card. 
  • Redeem 10K points for $100 cashback. 
  • Redeem 15K points for a $150 round-trip airline ticket. 
  • Redeem 50K points for a $500 round-trip airline ticket. 

Plus, Navy Federal Credit Union business lines of credit come with no foreign transaction fees or earning cap. The cards are great for business travel expenses. 

Business Checking and Savings

Navy Federal Credit union business checking and accounts provide essential financial building blocks for your business. The best part is that all accounts earn dividends. 

Business checking accounts include the first 30 transactions for free. Each transaction thereafter will cost 25 cents. There is no monthly service fee. These accounts are recommended for new businesses and those with limited cash flow activity. 

Business Plus checking accounts include the first 50 transactions for free. And, like the standard business checking account, each transaction thereafter will cost 25 cents. There is an $8 monthly service fee. These accounts are recommended for growing businesses with steady banking activity. 

Business Premium checking accounts include the first 100 transactions for free. And, each transaction thereafter, as with the standard and Business Plus accounts, will cost 25 cents. The monthly service fee will range from $0 to $20. These accounts are recommended for mature businesses with large transaction volumes and high deposit values. 

Business savings accounts come in three options at Navy Federal. 

  1. Money market savings accounts
  2. Jumbo money market savings accounts
  3. Certificates

Minimum deposits range from $100 to $100K. Market savings accounts come with no term restrictions. And, these accounts will typically earn more than a traditional savings account. 

How do You Open a Navy Federal Business Solutions Account? 

If you think you meet the Navy Federal business account requirements (LLC, Sole Proprietors, and Corporations), here are the steps to take to leverage Business Solutions. 

  1. Check your eligibility. If you are a military service member, Department of Defense civilian, or spouse, parent, grandparent, sibling, child, or grandchild of one, you may qualify for Navy Federal membership. 
  2. Become a Navy Federal Credit Union member. Apply for membership online through the organization’s website. Or, if you are not the service member, you will need to go into a branch to sign up. 
  3. Enroll in digital banking. Once your application has been approved, enroll in personal digital banking. 
  4. Complete a Navy Federal Credit Union business account application. Fill out the appropriate documents and submit them online or call 1-877-418-1462 to apply over the phone. 

Once you’ve been approved by the organization for a business account, you can access all of the services listed above. 

Related Answers: 

Can a business join a credit union?

Yes. Many credit unions provide financial solutions for both personal and business members. 

Can you join Navy Federal if you were not in the military?

Yes. Navy Federal was designed for veterans and active military, but you can apply for a membership if you have direct ties to someone who has served.   

What do I need to open a bank account with Navy Federal?

To open a bank account with Navy Federal, you must become a Navy Federal Credit Union Member. To qualify, you or someone in your household must have ties to the military. 

Does Navy Federal give small business loans?

Yes. Navy Federal Credit Union has several types of small business loans and lines of credit to extend to Business Solutions account holders. 

Does Navy Federal offer business credit cards?

Yes. Navy Federal Credit Union has several types of credit lines and small business loans to extend to Business Solutions account holders. 

Does Navy Federal check your credit?

Yes. When you apply for a line of credit or loan through Navy Federal, like most lenders, they will run a credit check. The institution may sometimes extend a credit line to someone with little to no credit history. 

Does Navy Federal have a minimum balance?

Yes. Navy Federal has a minimum $5 savings balance for members with a checking account, IRA, ESA, or certificate and $50 minimum balance for members with a standalone savings account. 

Does Navy Federal have Zelle?

Yes. Navy Federal members have free access to Zelle, a way to easily send money between US banking accounts within minutes. 

How do you build business credit?

To build business credit, you must apply for and make responsible payments on lines of credit extended to your business using your EIN or DUNS™ number. Learn more about credit for business via Business Credit Workshop.  

Final Thoughts

Navy Federal is a fantastic financial institution that doesn’t cost an arm and a leg to leverage. When you need to leverage working capital solutions or you want to open an account to build your business credit, this is an excellent channel to do so, if you can qualify. For more credit boosting advice, sign up for our free secrets to get $100K in business credit in 30 days. 

Can You Pay a Mortgage with a Credit Card? The Answer is… Complicated

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Can You Pay a Mortgage with a Credit Card? The Answer is... Complicated

Are you looking for a way to increase your credit spending and meet the sign-up bonus your new credit card issuer has offered? Or, perhaps your mortgage is due and you won’t get paid in time to pay it in full. Either way, you’re exploring your options. You’re asking, “Can I pay my mortgage with a credit card?” 

In short, the answer is ‘yes.’ However, your lender isn’t going to make it easy for you. So, let’s explore some of your options for paying a mortgage with a credit card.

We’ll look at the advantages and disadvantages of each option. After that, we’ll explore solutions to some of the problems that might arise so you can make an educated decision about whether or not to take this route. 

First, Why Would You Want to Pay Your Mortgage with Your Credit? Isn’t This a Bad Idea? 

In most cases, paying on any kind of loan with a credit card is a money-suck. Most credit cards’ annual interest rates run around 25%. Why would you pay that when you don’t have to? 

Plus, using a credit card rather than a check or ACH transfer to your lender requires more steps. Mortgage lenders do not traditionally accept credit cards as a payment option, so you have to find workarounds. 

However, there are some situations when you would want to use a credit card to pay your mortgage. 

  • Your property is facing foreclosure by your lender because of missed payments on your mortgage, and a credit card is your only funding option. 
  • You’re temporarily low on cash and want to avoid a late payment fee that is higher than the interest you would pay by using a credit card. 
  • You want to hang onto your cash because it’s accruing more interest in an investment fund than you would pay in credit card transaction fees for the cost of your mortgage (this is remarkably rare). 
  • You need to spend more in order to meet the sign-up bonus on your new credit card to collect points or other rewards. 

Unless you plan to pay the card down right away or you’re in a 0% APR introductory period, be wary. Using your credit card to pay your mortgage can come at a cost. But, if leveraged properly, you can come out ahead. 

2 Systems to Pay a Mortgage with a Credit Card

We’ve looked at methods to pay rent with a credit card. There, we explored ways to get your credit card balance to your property manager for rent payment. Rent is a bit simpler because there are platforms created just for property managers to help renters build credit (usually, before they are ready to buy homes).  

Now, what are the systems you can leverage to pay your mortgage on a credit card? 

  1. Take a cash advance from your card issuer and use it to pay your mortgage. 
  2. Use an online payment system to pay your mortgage with a credit card. 

Each method comes at a cost, so make sure you understand the advantages of each method before you proceed. 

The Pros & Cons of a Credit Card Cash Advance to Pay a Mortgage

A cash advance on a credit card is quick, convenient, and simple. All you need to do is contact your credit card issuer and request the advance. If you have a pin set up, you can simply withdraw funds from an ATM. So, you can access your funds immediately. 

Credit Card Cash Advance Advantages Summary:

  • Immediate access to funds
  • Convenient request methods

But, a credit card cash advance comes at a significant cost. According to CreditCards.com, average transaction fees for a cash advance are 5% and the average APR is 25%. Plus, APR will start to accrue instantly. These costs in addition to ATM fees are pretty hefty. 

For a $1,000 mortgage payment, you’ll pay $1,050 plus ATM fees immediately. And, for a $2,500 mortgage payment, it will cost $2,625 plus ATM fees upfront. Then, if you don’t pay your card off immediately, interest will pile up. So, if you take out a cash advance, you’ll pay more than necessary to access your funds.

Furthermore, a cash advance will not count toward spending to earn introductory points or rewards from your card issuer. So, if your reasoning for paying your mortgage with a credit card is to earn bonus points on your card, this isn’t the way to do it. 

Credit Card Cash Advance Disadvantages Summary:

  • Average transaction fees of 5%
  • Average instantly-accruing interest of 25%
  • Unnecessarily high costs
  • No credit card bonus points or rewards earned

The Pros & Cons of an Online Payment System to Pay a Mortgage

An online payment service like Plastiq will enable you to pay your mortgage with a credit card. Currently, the average transaction fee for using their service is 2.5%, about half the cost of a cash advance. So, the cost of one of these systems is low. 

Pay Your Mortgage With a Credit Card Plastiq

Be sure to double-check the fees for each online payment service before you opt to use one of them as the terms and conditions are subject to change at any time. 

In addition, you can use most major credit cards to pay nearly any bill. For added convenience, Plastiq accepts major credit cards for mortgage payments. Currently, this includes MasterCard, Discover, JCB, and Diners Club credit cards. 

Furthermore, you don’t have to get pre-approval from your lender. Plastiq will send them an ACH transfer, direct deposit, or a check on your behalf in exchange for a small percentage of the transaction. Pay one-time, manually as needed, or set up automatic payments. This option gives you a ton of freedom. 

Online Payment Service Advantages Summary:

  • Low transaction fees (2.5%)
  • Can conveniently pay multiple bills that do not accept credit card payments
  • Use MasterCard, Discover, JCB, and Diners Club credit cards to pay mortgage
  • Experience freedom in your options 

But, because of restrictions in place by the credit card companies, you cannot use Visa or American Express cards to pay a mortgage with Plastiq (though, you can pay other bills with these cards). So, if you’re looking to boost the points on one of these cards, think again — they just don’t allow it. 

And, you have to consider the cost. Is 2.5% of your mortgage payment transaction actually worth the bonus points you will receive? The answer to this will depend on your credit card and rewards program. 

Online Payment Service Disadvantages Summary: 

  • You can not use Visa or American Express credit cards to pay your mortgage, under any circumstances.
  • The cost of transaction fees may not outweigh the number of bonus points that you can earn. 

Related Answers:

Can you use a credit card to pay your mortgage?

Yes. With certain online payment services, you can convert credit card funds into check, wire transfer, or ACH transfer funds to pay your mortgage, but there are stipulations. For example, there will always be a transaction fee.

Can you buy a house on a credit card?

Yes. You can use online payment services to convert your credit into check, wire transfer, or ACH transfer to buy a house. But, again, there are stipulations.

Do real estate agents accept credit cards?

Yes. Like any other independent service providers, real estate agents can enable their clients to make payments with a credit card. However, not all real estate agents will accept credit. It is the decision of each agent to accept cards or not.

Can you pay closing costs with a credit card?

Technically, yes. You can use certain online payment services to convert your credit into a check, wire transfer, or ACH transfer to pay the closing costs on a mortgage. But, as with other non-traditional payments you might make with a card, there are stipulations.

What does Doxo mean?

Doxo is the name of a financial app that allows users to pay their bills online, as long as the providers are part of the Doxo network.

Final Thoughts

So, you can’t hack your introductory rewards points on a Visa or American Express card to pay your mortgage. But, you can enlist an online payment service to boost your points with on a MasterCard, Discover, JCB, or Diners Club card for a low fee. Or, if you’re in a pinch, you can get a cash advance from your card issuer to pay your mortgage. 

As an added perk, if you pay your card as agreed and keep your balance within a healthy ratio, paying a mortgage with a credit card can help you boost your credit score. To learn more credit building tips, sign up for our free business credit training today.

This is How to Pay Rent with a Credit Card (Home or Business)

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pay rent with credit card

Your rent is almost due, and you’re looking for a way to increase your credit card spending so you can leverage your card’s sign-up bonus. Or, you’re temporarily low on cash, but you’ve got plenty of credit to leverage. So, you’re asking “Can I use a credit card to pay rent?” Here’s your answer: there are ways, but they require further explanation. 

So, here’s everything you need to know to make a rent payment (or multiple rent payments) with a credit card.  First, see a summary of your options. Then, look at the pros and cons of each. After that, learn the answers to some relevant questions so you can decide whether paying with a credit card is the right choice for your situation. 

3 Top Ways to Pay Rent With a Credit Card

You know you can make rent payments with your credit card. But, what options do you actually have? Here are three methods for getting commercial or residential rent paid with your credit. 

  1. Request a cash advance from your card issuer and pay rent with the money.
  2. Introduce your landlord to a service that enables them to accept credit cards for rent payments from tenants. 
  3. Use an online payment service like Plastiq or CardUp. 

Each of the above options can work in the right situation. So, learn more about each method so you’re sure to make the right choice. 

If you’re not a renter, but you need a way to utilize your card’s sign up bonus, learn how you can pay a mortgage with a credit card.  

The Ins and Outs of Using a Credit Card to Pay Your Rent 

Now, should you ask your card issuer for a cash advance, convince your landlord to try a new system, or leverage an online payment service? Explore each option below to determine which, if any, is best for you and your situation.

Method #1: Take a Cash Advance From Your Card Issuer to Pay Rent on Your Home and/or Commercial Space

The most obvious, fastest, and simplest way to pay your rent with a credit card is to request a cash advance from your card issuer. Basically, you call your credit card company and request a cash advance in the amount of your rent. Then, the card issuer makes a deposit into your bank account. 

In exchange, you pay the associated fees and your card payment balance instantly increases. After that, you can use your increased bank account balance to pay your rent. Easy, right? 

So, this would typically be the right option when you’re desperate. If you’re short on time, funds, and need to get the rent paid, a cash advance will work. Just be aware that this method will cost you. 

According to CreditCards.com, here are the average costs for a cash advance. 

  • Transaction fees: 5%
  • Interest: 25% 

Also important to note, on an advance, you don’t have a 30-day+ grace period in which interest will start to accrue. Instead, you will begin paying interest immediately. 

The transaction fees alone on a $1,000 cash advance will be around $50. Then, you’ll usually pay even more toward interest, depending on how long you wait to pay it off. 

Furthermore, a cash advance will not typically count toward credit card rewards. So, if you’re paying your rent with a credit card to leverage points, this method won’t help you much at all. 

Will a Credit Card Cash Advance Help Boost Your Credit Score? 

Yes, if you pay your card balance as agreed, a cash advance has the potential to help you increase your credit score. On-time payments can impact your score with all major credit bureaus. And, credit card issuers typically report payment history each month. 

However, especially since other methods cost less, avoid a cash advance on your credit card unless you’re in a pinch. And, pay back the advance as soon as possible to avoid paying more than necessary.

Method #2: Introduce Your Landlord to an Online Rent Payment Service to Enables Them to Accept Credit Cards for Tenant Rent Payments

Many property management companies already allow their renters to pay rent online. So, before you finish learning about this method, are you sure your landlord doesn’t already offer an online payment opportunity? If you are sure, read on — you may be able to show them a new, mutually-beneficial system. 

Which is the Best Online Rent Payment Service? 

There are several modern cloud-hosted property management software options that enable you to pay your rent with a credit card. So, try to get your landlord on-board by introducing them to a new, more convenient option like one of the following.

Which is the Best Online Rent Payment Service?

As you can see from the above chart, this method is much less expensive than taking a cash advance on your credit card. However, you will still pay interest based on the agreement you have with your creditor. 

And, when you pay rent on-time, some platforms like RentTrak and PayYourRent will report your payment activity to credit bureaus. So, not only will you receive a credit boost from paying your credit card on-time; you will also get a separate positive mark on your credit report for paying your rent. So, in some cases, this method has double credit-boosting power. 

Moreover, in most cases using a credit card to pay rent to one of the above companies will count toward your card’s promotional bonus points. Just double-check your card issuer’s promotional terms and conditions to be sure. 

There are a lot of benefits to going this route. The only major hurdle is that you have no control over whether or not your property management company will want to implement this route. So, you’ll have to work out your sales muscles. 

And, if you take this route, theoretically, late rent payments can negatively affect your credit score. You will open a new set of risks along with the rewards. But, as long as you consistently pay your rent on-time, you shouldn’t experience any problems. 

Method #3: Use an Online Payment Service to Pay Rent on Your Home and/or Commercial Space With a Credit Card

Finally, online payment services can be used to pay rent (and nearly any other bills) with a credit card. In exchange for a small fee, these systems make it easy for you to maintain complete control over which bills are paid from which funding sources (i.e. pay your rent with a credit card). 

Online payment services like Plastiq, CardUp, and RadPad invite users to pay bills and buy items with credit cards where cards are not typically accepted. Use your Visa, MasterCard, American Express and other major credit cards to pay your rent using this method. 

Essentially, you connect your credit card to the service as a payment method and the system automates your rent payment using the means that your landlord prefers. Your payment can be sent as a check, wire transfer, or ACH transfer. 

Online Payment Service Comparison 

The following comparison table includes processing fees followed by which cards are accepted by Plastiq, CardUp, and RadPad. 

Plastiq vs CardUp vs RadPad

The only downside to this method is that you will pay a fee in addition to your card’s regular interest charges for each transaction.  If you opt for an online payment service to automate your rent payments, you will only pay a small transaction fee for using the platform. 

So, this can be an excellent option to pay rent with a credit card and simultaneously leverage your card’s sign up bonus and boost your credit score with on-time payments. And, in some cases, the landlord or property manager will opt to cover the transaction fees for their tenants’ convenience. 

Conclusion

To pay your rent with a credit card, you can take out a cash advance, introduce your landlord to a new payment platform, or use an online service. Each method comes with a unique set of advantages and disadvantages. 

For many people, online payment services like Plastiq or CardUp are wonderful options for paying your rent with a credit card. You can leverage these systems with fewer fees than a cash advance. Plus, you won’t have to convince your property management company to make any internal changes to their business processes. 

However, if your main goal is to improve your credit, put in the extra effort and ask your landlord to move to a platform like RentTrak or PayYourRent that enables you to pay rent with your credit card and reports on-time payments to the major credit bureaus. 

For more valuable advice, sign up for our free business credit training today. 

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