7 Business Car Loan Options

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If you are looking for a business auto loan, you have many options. You can go with a traditional lender or explore alternative lenders. In this article, we will discuss 7 loan options to consider if you are looking to buy commercial vehicles or special vehicles.

What is a business auto loan?

Business auto loans, like commercial truck loans, are small business loans typically used by businesses that need vehicles for work purposes, such as sales representatives or delivery drivers.

However, small business auto loans are generally more expensive than consumer loans. This is because a consumer auto loan is less risky for the lender.

How does an entrepreneur finance a car?

If you’re a business owner looking to finance a car, there are a few things you need to do to make sure you get the best deal possible.

  • Get approved: First, you’ll need to get credit approved from a lender. This will help you determine how much money you can borrow.
  • Find a Lender – You will need to find a commercial vehicle finance company that offers competitive rates. Shop around and compare offers from commercial auto loan lenders before settling on a lender.
  • Monthly payments: Once you’ve found a lender, you’ll need to calculate your monthly payment. This will help you budget for your loan and make sure you can afford the payments.
  • Get a loan: Once you’ve found a lender, you’ll need to apply for a business auto loan. Make sure you have all your financial documentation in order, such as tax returns and business financial statements.

How do business auto loans work?

This type of commercial loan is secured by the vehicle, which means that if you default on the loan, the lender can repossess the vehicle. Commercial auto loans typically have lower interest rates than personal auto loans, and may also include additional benefits such as flexible repayment terms.

To qualify for a business auto loan, you’ll typically need to have a good credit score and a solid business financial history.

The best lenders for commercial auto loans

Let’s take a look at the following list of business auto loan providers and find the best fit for your specific needs:

1. Bank of America

Bank of America offers car loans to customers who want to buy or refinance cars. Interest rates start at 3.99% and small business loans start at $10,000. Loans can be used to buy or refinance cars, light commercial trucks or vans. The repayment term is four to six years and the commercial vehicle age limit is up to 5 years with a mileage limit of up to 75,000 miles. There is no specific minimum credit score or minimum time in business requirements.

2. Wells Fargo

Wells Fargo is a trusted lender with a variety of loan products available. Their initial APR is 6.25% and they charge no origination or maintenance fees. There’s also no prepayment penalty or termination fee, and the only additional fee is a $150 documentation fee. Loan amounts range from $10,000 to $100,000, with repayment terms up to 84 months.

3. Capital One

If you need a business loan, Capital One is a great option. They offer loans starting at $10,000 with repayment terms of up to five years. To qualify, you must have or be willing to open a Capital One business checking account, and your business must have been in business for at least two years.

4. Balboa Capital

If you are a small business owner in need of some quick cash, Balboa Capital may be the lender for you. This alternative lender specializes in equipment financing and offers same-day financing for loans up to $500,000. You’ll need to have been in business for at least one year and bring in at least $100,000 in annual revenue to qualify, and your personal FICO score should be above 620.

5. Ally Bank

Ally Bank is a great option for financing your car rental. They offer flexible leases without personal guarantees and have specific loans for heavy trucks and vehicle modifications. Also, they offer financing in the name of the business only, so you may not be responsible for any loan defaults.

6. National Funding

Domestic financing is a great option for startups and businesses with bad credit. They offer financing up to $150,000, and eligibility criteria are less strict than with other lenders. You only need to be in business for six months and have a FICO score of 575.

7. Crest capital

If you need a business loan in a hurry, Crest Capital is one of the best options. They can fund loans up to $1 million within a term and if you’re borrowing $250,000 or less, you could have the money in your account within 4 hours. The terms of the loan are also very flexible, ranging from 24 to 72 months. However, one drawback is that a personal guarantee is required for all loans.

Should you buy or lease a car for your business?

It depends. If you only need the car for a short period of time, or if you expect to use it infrequently, a commercial car rental may be the best option. Leasing can also be a good option for business owners who need a high-end or luxury vehicle that they otherwise couldn’t afford to buy outright. However, if you plan to put a lot of miles on the car or if you plan to keep it for several years, buying may be the best option.

Which bank is best for commercial auto loan financing?

Bank of America is a great choice overall, primarily because of its low APR and easy-to-meet commercial auto loan ratings. However, remember that to get the best possible deal on a commercial car loan, it’s important to compare offers from multiple lenders and choose the one that best suits your business needs.

Do business auto loans appear on a personal credit report?

No, business auto loans do not appear on your personal credit report and will not affect your personal credit score. However, if you default on the loan, the lender can repossess the vehicle and this will appear on your business credit report.

What Business Credit Score Do You Need to Buy a Car?

When looking to finance a new car, the first thing most lenders will look at is your business credit score. This three-digit number is a key factor in determining whether or not you’ll be approved for a loan, as well as the interest rate, and it can also affect the interest rate you’re offered. In general, you’ll need a business credit score of 660 or higher to buy a car.


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