Car loan options for business owners.
There are many similarities between personal and business loans, but there are some important distinctions that should be made too. Importantly, shop around for a loan to find one that fits your needs.
The following are among the points to consider when shopping for a business auto loan:
1. EIN — Use your Employer Identification Number (EIN) not your Social Security Number (SSN) when applying for a loan. Make the distinction between business and personal use apparent while protecting your own assets accordingly. Discuss these options with your accountant.
2. Competitive Rates — Auto loan rates for business accounts are typically competitive and should parallel the going rate for consumer loans. Just as your credit score impacts your personal loan, your business score affects your business auto loan.
3. Full Financing — Some lenders will finance the entire price of your new vehicle with no money down. That amount can include taxes and fees for a no-cash up front proposition. However, consider how not putting money down can affect your monthly payments.
4. Speedy Approval — Lenders are quick to render decisions on consumer loans including auto loans. The same can usually be said for your business auto loan. You may receive preliminary approval within minutes of applying for your loan with final approval contingent upon submitting certain paperwork such as your balance sheet or a profit & loss statement.
5. Flexible Terms — The same flexibility consumers enjoy in loan terms are usually available with business auto loans. The standard 36- to 48-month auto loans are often joined by 60- to 72-month auto loans. Further, a variety of business leases may be available including both closed- and open-leases.
6. Automatic Payments — Business auto loans are paid back in a variety of ways. The traditional send your check off for monthly payment option is the standard. You may also make payments by means of direct deposit or account transfer. Discuss with your lender the available opportunities and choose what is right for you.
7. Fleet Funding — If you need to purchase two or more vehicles, fleet funding may kick in. With fleet funding, even better lending terms and conditions may follow. Some lenders also allow you to include certain off-road equipment or large commercial vehicles in the mix such as earth-moving equipment or dual-axle pickup truck.
8. Used Vehicles — Not every business owner wants to buy new and some lenders are just as eager to provide the funding for a used vehicle too. Discuss with your lender your options and the rates offered. Keep in mind that the older the vehicle, the more likely you’ll incur more repairs.
Business Auto Loans
Your current business lender is one source for obtaining a business auto loan, but not the only one. Obtain rate information from at least three other lenders and choose the bank or credit union that is best for your business’ needs.
See Also — How to Shop For a Car Loan
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