Trucking is a thriving industry that has managed to survive everything the world has thrown at it. Demand for the transportation of goods has never been higher, which has been largely accelerated by the COVID-19 pandemic.
Businesses and individuals alike have increased their expectations, and truckers are responsible for meeting that demand. Without trucking companies, the nation would come to a screeching halt.
That’s why there’s no better time to start a trucking business. Let’s look at some of the trucking grants available to help you get your new venture off the ground.
What are Trucking Grants?
Can you start a trucking company with no money?
The answer is a resounding yes. It all starts with financing. Obtaining a “start a trucking company grant” can enable you to cover all the necessary registrations and secure the equipment needed to make your first runs.
Contrary to popular belief, you don’t need to start with a massive fleet. Grants for truck drivers allow professional drivers to get started with as little as one truck. Opportunities for expansion through further grants for owner-operator truck drivers are available.
Remember, unlike loans, grants for a trucking business generally are considered types of financial aid, so they don’t have to be paid back. As you would expect, they’re harder to obtain than conventional forms of financing.
7 Grants to Start a Trucking Company
It isn’t always obvious where you should turn to secure trucking grants. Professional drivers looking to start a new business venture or entrepreneurs who see potential opportunities within this industry often dismiss the idea of grants entirely.
With the right knowledge, you’ll find that there are plenty of options for finding grants to start a trucking company.
The best part of applying for grants first is you have an opportunity to launch a trucking brand without putting yourself into debt from day one.
1. SBA 8(a) Business Development Program
The Small Business Administration (SBA) is well-known for providing business owners with a chance to secure government contracts. The SBA aims to award at least 5% of government contracts to new and small businesses every year.
The whole point of this program is to support socially disadvantaged or economically deprived entrepreneurs. If you have a low income, come from a minority group, or hail from an economically depressed part of the country, you could qualify.
Take note, these government grants for truck drivers require a lot of paperwork and a lengthy application process.
2. FedEx Small Business Grant Contest
FedEx is one of the largest trucking companies in the country. The FedEx Small Business Grant Contest gives you a chance to win up to $50,000 to launch your new business venture.
While not limited to truckers, everyone is welcome to apply. All you need is a compelling story. Finalists are narrowed down to a shortlist of 100, and there are five possible winners.
Generally, the more inspirational your story, the better the chance you have of winning one of these grants to start a trucking company.
3. NASE Growth Grants
The National Association for the Self-Employed has a mission to support the growth of small businesses across the nation. These grants are worth up to $4,000 and must be used for activities like hiring new employees, expanding facilities, and marketing.
The catch is that you need to be a member of NASE to qualify and be a member in good standing. For newbie entrepreneurs, it’s well worth joining the community now and applying for a grant later as you get your business off the ground.
4. Veteran-Owned Business Opportunities
Do you have a history of military service? Then you could qualify for trucking business grants through the Department of Veterans Affairs.
The Department of Veterans Affairs maintains a Veteran Entrepreneur Portal that connects veterans with grant opportunities specifically aimed at them. Naturally, each program has its own separate set of guidelines, but most are relatively similar.
If you have a disability resulting from your service, the VA also has its VR&E Self-Employment Track, which provides aid in the basics of starting a business, such as creating your business plan.
5. USDA Rural Business Enterprise Grants
Truckers operating from rural areas have access to special grants from the U.S. Department of Agriculture. You must come from a qualifying area to apply for one of these government grants for truck drivers.
Grants can range from $10,000 to $500,000, but it should be noted that smaller grant requests get priority, so only apply for what you need.
The USDA website has a full list of the areas that qualify, so check it out before applying.
6. School Grants
Anyone who’s brand new to trucking knows that they need to obtain certifications and licensing before they can start operating. Training costs money, but some schools provide grants to people looking to retrain.
The Pell Grant is one such example that provides grants to students who want to attend school. Each grant will have specific requirements, such as program length, so read the rules carefully before applying.
7. Nav Small Business Grant
Nav regularly offers loans and grants to small businesses. The Nav grant program welcomes small businesses to apply for a grant of up to $10,000.
All you have to do is create a free account and tell your story via your business’s Facebook page. Like the FedEx program, Nav will select small businesses for a grant based on their story and background. The more compelling, the better the chance you have of receiving one of these trucking grants.
Other Financial Resources to Start a Trucking Business
Grants for truck drivers tend to be difficult to secure. There’s significant competition for these grants, so the likelihood of getting selected is low. Furthermore, most grants won’t cover everything you need to get started, such as purchasing equipment or hiring employees.
The majority of business owners will need to seek out other financial resources to get off the ground.
The SBA is the best friend of the new business owner. They offer several financial assistance options for truckers who’re ready to launch their new venture. Most of their loans come with low-interest rates and generous repayment terms. Plus, there are typically fewer restrictions on what you can spend the money on compared to private lenders.
The SBA 7(a) Loan Program is the most common avenue for entrepreneurs. You’ll be able to access up to $5 million in financing. Furthermore, the SBA will guarantee 85% of loans up to $150,000.
This is the next best option when you can’t find grants for truck drivers to buy a truck.
Regular expenses for truckers include fuel and minor vehicle repairs. Fuel cards are accepted at most gas stations and garages in the country. Also known as fleet cards, you can access rebates which can really add up over time.
The best value fuel cards provide cents on the gallon, with almost no monthly fees attached. Make sure you do your research before investing in fuel cards.
Business Loan Matchmakers
Free loan matchmaking services are an excellent way of tracking down the lenders that are likely to approve your loan application.
All you need to do is fill in a single application, and you’ll be matched with the businesses that give you the best chance of qualifying for one of their loans. There are plenty of services offering this matchmaking service, so it’s well worth trying if you’re searching for a conventional small business loan.
Is a Trucking Business Grant Right for You?
Should you apply for trucking grants over traditional financing?
There are many reasons why this is an avenue well worth pursuing. At the same time, you must be aware that this option has some drawbacks. We cover those in the section below.
If you’re deciding whether to invest your time in applying for grants for trucking companies, here’s what you need to know.
No Repayment Necessary
It’s no secret that most small businesses fail. Your business’s lifespan is even shorter if you’re already repaying debts from the moment you start working. Grants have the advantage of not requiring any repayment.
As long as you stick to the terms of trucking business grants, you’ll never have to repay a single cent. That’s reason alone to apply for a grant or two when getting started.
There are more grants than ever before from both government organizations and the private sector. You have a wealth of opportunities to qualify for grants. It’s also well worth searching for local options, as your municipality may be looking to help small businesses get off the ground.
As mentioned above, grant matchmaking services exist. Just fill in a form, and you’ll be instantly matched with potential grant opportunities for which you qualify.
The key to small business survival is being able to rapidly grow and expand. Grants for truck drivers are not reserved exclusively for those preparing to get started.
Many grants exist for small businesses that need some working capital to enlarge their operations. Grants allow for rapid growth without taking on additional liabilities, which make them extremely valuable.
What are the Drawbacks of Trucking Grants?
Grants themselves have few disadvantages, but there could be problems when it comes to the process of obtaining them in the first place.
Conventional financing could be a better option for truckers in certain situations. Let’s examine the drawbacks of trucking business grants.
- Time-Consuming – Most grants require a lot of time and effort to apply for. Whether government or private, grantors tend to be highly selective about who they give money to. It can take months to find out whether you have been chosen for a grant.
- Competitive – The prospect of money that doesn’t have to be repaid means you’re competing with potentially thousands of businesses for the exact same grant.
- Limitations – Most grant programs stipulate what you can and can’t spend the money on. Restrictions tend to be tighter than with conventional financing, so make sure you read the terms and conditions carefully.
Grants are unlikely to cover every single business expense. Most truckers rely on a mixture of personal savings, conventional financing, and grants to secure their first clients and make those all-important delivery runs.
Certainly, apply for a small business grant for your new trucking business, but don’t rely on them for your grand opening.
How Tenstreet Can Help You Get Started
Successful small trucking businesses have a lot to take care of that goes beyond simply eating up the miles. You need the right truck management system to control your business, from hiring employees to managing road safety.
Once you’ve got your first truck, Tenstreet can help you manage the most important aspects of your new business so you can focus on succeeding and growing. Tenstreet On Demand is a software solution for smaller fleets that lets you streamline your recruiting, onboarding, marketing, and safety efforts only when you need the help.
On Demand offers a DOT-compliant online application drivers can complete in minutes, job posting capabilities, subject and application tracking, paperless employment verifications, post-hire management, reporting, and more. Pay only for the months you use the service and come back whenever you’re ready to use the tools again.
Learn more about how Tenstreet On Demand can help your business thrive!