Best Business Auto Loans
What is a Business Auto Loan? A business auto loan also known as commercial auto loan is a type of financing you can use to purchase a vehicle for your company. The loans cover cars, trucks, and vans. However, an equipment loan or commercial truck loan is most required for a heavy-duty vehicle. Apart from business auto loans, loans are also common in personal finance, student loans, and mortgages. Business loans are the same, but instead of being used to finance personal properties, they are used to finance a business.
When you get business auto loans to purchase a car, you repay that money plus interest over a defined period. This is also similar to personal auto loans with a few differences;
- Vehicle purchase with business auto loans is for business purposes and meant for company use. In most cases, the lender would ask you for what you want to use the vehicle for and some documentation like a business plan, company’s financial statement, and so on.
- In the case of business auto loans, potential tax deductions are available. If you buy or lease a business vehicle, you can deduct its ownership and operation costs.
- Vehicle purchase with a business auto loan can also be your business name. In the case of qualified borrowers, some lenders will let you put a business auto loan in your company’s name only. This can protect your personal credit or assets in case your business fails and unable to repay the debt. In other cases, the provision of a personal guarantee for the loan is collateral is required.
Where Can I get Business Auto Loan?
Banks and business owners stand as lenders of business auto loans for cars, vans, and trucks.
Business and commercial auto loans come with collateral which is the vehicle itself. This means that the vehicle may cost less and you may not have to provide a personal guarantee to secure the debt depending on the lender.
Below are lists of business auto loan lenders where you can get a loan to elevate your business
What are the Banks that offer Business AutoLoans?
Below are lists of some banks that offer business auto loans. Also, note that the lowers loan rates are given by small business banks
1. Bank of America Business Advantage Auto Loan
It is good for business owners who want time to shop around for a vehicle.
Its annual percentage rates, or APRs, for Bank of America Business Advantage Auto Loans begin at 2.99%. Loan amounts range from $10,000 to $100,000 and can be used to buy cars, light trucks, and vans.
2. Capital One Business Auto Loan
It is the best for businesses older than two years. The business auto loan of capital one starts at $10,000 and its repayment terms last up to 5 years. Note that you must have or open a business checking account with Capital One to qualify for its business auto loans. You must also have been in business for at least two years.
3. Ally Bank Business Auto Loan
It is the best for flexible auto leases and no personal guarantees. Ally Bank offers multiple business auto funding options, including specific loans for heavy-duty trucks and vehicle modifications, like adding towing equipment.
If you however qualify of Ally business auto loan, it offers business-name-only financing. which means you may not be held personally responsible for the auto loan in the case of nonpayment. Leases can also be open- or closed-ended.
4. Chase Business AutoLoan
It is the best for existing Chase customers. Chase business auto loans offer sparse details. Both used and new commercial vehicles qualify, and you can use loans for financing or refinancing eligible costs.
5. Wells Fargo Equipment Express Loan
It is best for Low-cost loans. Wells Fargo has temporarily stopped its Equipment Express Loan program to focus on Paycheck Protection Program loans.
The Equipment Express Loan typically lets you finance or refinance passenger vehicles as well as trucks and trailers from $10,000 to $100,000, with fixed rates starting at 4.50%. Wells Fargo offers semi-truck financing via a separate commercial loan program if you need a heavy-duty vehicle.
What are the Commercial Auto Loans from Alternative Lenders?
Alternative lenders are non-bank financing options. These lenders may charge more, but their vehicle loans are good if you can’t qualify with a bank or in need of money urgently. See the list below;
1. National Funding
It is good for startups or borrowers with bad credit. National Funding is an alternative lender with commercial vehicle financing and leasing of up to $150,000. Its eligibility criteria are not as strict as other business auto loan providers, which gives room for more business owners
2. Balboa Capital
It is good for Same-day funding for commercial trucks. Balboa Capital is an alternative lender that specializes in equipment financing. It offers commercial truck loans of up to $250,000 for vans, flatbeds, and other vehicles. You will need one year in business and at least $100,000 in annual revenue in order to qualify for Balboa Capital loan.
3. Crest Capital
It is good for Hard-to-finance trucks or specialty vehicles. Crest Capital is an alternative lender that provides business auto loans of up to $1 million. Crest Capital is a good choice if the vehicle you want to buy or lease won’t qualify for traditional financing.
How Can I get a Business AutoLoan?
- The first thing to do is to decide and find the right vehicle. This should be the type of vehicle that meets your business’s needs, and which the lender will approve.
- The second thing to do is compare the offers. If your company has a relationship with a financial institution, it can help you to see if it offers business auto loans.
- The third thing to do is apply to a lender. Also, know that their application procedure will differ and the process may require some paperwork and documentation.
What are the Best Business Autoloans Alternatives?
Other alternatives to business auto loans include;
- Small-business loans.
- Consumer auto loan
- Personal business loan