Business vehicle loans are financing that a small-business owner can use to buy cars, vans and heavy-duty trucks for company purposes. These are similar to consumer car loans, but they require more paperwork and documentation.
Whether your business needs new or used vehicles, there are plenty of lenders that offer commercial vehicle loans to fit your needs. These loans can be a great way to help your business grow and succeed without spending your own cash.
Commercial vehicle loan rates are often lower than bank auto loan rates, so you can save money to put toward your dreams of growing your business. These types of loans usually come with flexible terms and are available for both new and used vehicles.
How to Choose a Commercial Vehicle Lender
You should shop around for the best rate and terms for your specific loan needs. Look for a lender that offers low down payments and a low credit threshold. Some lenders can even finance a portion of the price of the vehicle and charge a lower interest rate than traditional banks.
Consider a commercial vehicle loan from a credit union
You may qualify for a commercial auto loan through your local credit union. Some credit unions have specialized lending departments, while others offer a wider range of loan products.
For example, PNC Bank can finance commercial vehicles up to 250,000 pounds and has a 3.9-star rating on Bankrate. You can also take advantage of their small business vehicle loan program that includes fixed rates and up to 100% financing of the total invoice amount.
The best lenders for commercial vehicle loans are those that offer competitive rates, flexible terms and the option to finance a single or multiple vehicles. You should also check to see if they offer any incentives, such as free monitoring of your Dun & Bradstreet credit report and score or a relationship discount.
When applying for a commercial vehicle loan, consider your personal and business credit scores. Many lenders have credit requirements and want you to provide your employer identification number or Social Security number, as well as bank statements, tax returns, and other documents showing your income and creditworthiness.
If your credit isn’t very strong, you may need to be a co-borrower or a guarantor. A co-borrower is another business owner who agrees to guarantee the loan, but does not personally owe any of it. A guarantor, on the other hand, carries the liability for a loan and can impact your personal credit score.
Get a commercial vehicle loan from a reputable lender
When choosing a commercial vehicle loan, you should make sure it offers flexible terms and is a good fit for your business. Most lenders will have minimum down payments and credit thresholds, and you should be sure to read the fine print of your contract.
A good lender will also allow you to customize your terms and repayments. For instance, you may be able to get lower rates or more flexible terms if you pay your monthly payment by instalments instead of all at once.