Can a tow truck company get a business loan?

Tow truck financing options

Tow truck businesses (NAICS 488410 — Motor Vehicle Towing, under subsector 4884, Support Activities for Road Transportation) typically finance across three categories:

• Equipment financing — covers purchase of new or used tow trucks. A rotator (heavy-duty recovery) truck runs $200,000–$600,000; a flatbed/rollback runs $80,000–$150,000; a light-duty wheel-lift runs $60,000–$80,000. Lenders finance up to 100% of the truck's purchase price with the truck as collateral, with terms of 48–84 months depending on truck type — see equipment financing vs. term loan for how the structures compare.
• Working-capital lines of credit — used for ongoing fleet maintenance, fuel, tire replacement, and driver payroll between dispatch cycles.
• SBA 7(a) — for established tow operators (2+ years) looking to expand fleet, open a second yard, or refinance higher-rate equipment debt.

Commercial insurance costs and lender scrutiny

Commercial tow truck insurance runs $5,000–$25,000+ per truck per year depending on coverage, state, and driver history. Lenders include insurance premiums in the debt service calculation — high insurance costs can compress DSCR (check yours with the DSCR calculator). Underwriters verify active, current commercial auto and garage keepers' liability insurance before funding. Lapses in coverage are a red flag.

City tow rotation contracts — how they strengthen applications

Many municipalities assign tow operators to a city-issued rotation list — when an accident or abandoned vehicle call comes in, dispatch rotates through approved operators. Being on a city rotation contract provides predictable, recurring revenue from municipal work. Lenders view rotation contract income favorably as a lower-concentration, government-backed revenue stream. If you have a rotation contract, include it in your application.

What underwriters look for

• 3–6 months of business bank statements showing consistent dispatch and storage fee deposits.
• Active commercial auto insurance and garage liability coverage — no lapses.
• Driver record documentation — MVR reports for employed drivers; DUI history or frequent violations can affect insurance and thus financing.
• Business license and any city tow rotation permit or contract.
• Revenue concentration — lenders check if most revenue comes from one fleet client or city contract vs. diversified sources.

Apply at ClearValue Lending

ClearValue Lending routes tow truck operators to equipment lenders, working-capital providers, and SBA lenders who specialize in transportation businesses. Apply through the ClearValue Lending portal with your commercial insurance declarations page, 3–6 months of bank statements, and truck purchase quote or invoice.