For operators with businesses that run fleets of pickup trucks and trailers

May 19, 2025

by a searcher from Rice University - Jesse H. Jones Graduate School of Business in Houston, TX, USA

How have you handled the need to rotate your fleet while managing an SBA 7(a) loan? I'm especially interested in how lenders respond to the need to sell and replace rolling stock before it's fully depreciated — ideally around the 5- to 7-year mark — to avoid reliability issues and poor resale value. I'm currently looking at a few businesses with 5+ pickups that accumulate mileage quickly, and I’m concerned that holding onto these vehicles too long would create operational headaches. Have any of you worked with lenders who understand and support ongoing asset rotation? If so, how did you structure that conversation prior to close and did you include any specific wording in loan docs?

Reply by a searcher
from University of Texas at Dallas in Dallas, TX, USA

Hey Chris, I bought a business with 7a that has exactly 5 vans/trucks and we had to replace two of them in the first 6 months. The lender basically just didn’t want to see their exposure increase via collateral reduction or without seeing the principal paid down a bit. On the first one, I was able to get the title from the bank in exchange for the title on a new vehicle we paid cash for. The second we essentially bought the old title from the bank, sold the vehicle then financed a new one. In my case, I didn’t talk to the bank up front because the vehicles should have been fine for at least 1-2 years but one was totaled and the other had a freak mechanical issue making it not worth it to repair. If you go in with the plan of rotating up front you can surely work something out.

Reply by an intermediary
from Spalding University in Prospect, KY 40059, USA

Great commentary here. I've been in this space for quite some time and you very much want to make sure you aren't stacking debt on debt with your 7(a). I strongly encourage you to either obtain an equipment appraisal or have very realistic conversation about stated values on your bill of sale. The bank wants collateral and sellers don't want to recap their depreciation. Do not get caught upside down on your equipment due to the term of your debt and the life of the equipment.

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