The following tips for choosing the right business auto loan lender can help you find the right loan for your business, regardless of business size or credit history. Most retail auto lenders, including those backed by auto manufacturers, offer loans to business entities including corporations, limited liability corporations, limited liability partnerships, sole proprietors and business with assumed names (DBAs).
Depending on corporate credit history, profit and time in business, a business may qualify to have a loan solely in the business name. The individual underwriting requirements vary from lender to lender, but annual income will likely have to be over $1 million per year.
For businesses that do not meet the requirements to finance a vehicle solely in the business name, a personal guarantor is a good option. A personal guarantor with a strong personal credit history can sign on behalf of the company and as a personal applicant to ensure loan approval. A personal guarantor is also a good option because having an individual’s name tied to the loan can result in a tier A or tier 1 credit approval, which makes the loan eligible for the best rates possible. These ultra-low rates are not always extended to contracts that do not include a personal guarantor.
The finance company may also require a statement of resolution that is completed by a stakeholder in the company. This statement authorizes the personal guarantor or other individual signing on the company’s behalf to complete the paperwork and take legal possession of the vehicle. This statement is used in the event that any dealer-buyer arbitration commences after the purchase.
The finance director at a car dealership will be able to assist you with any particular concerns or questions you have regarding a business auto loan lender. A finance professional can also inform you any special paperwork that may be required for your situation.