Business auto loans are available through a number of channels, including credit unions and banks. Credit unions only require the borrower to be a union member. Along with this, customers can access advisory services on how to manage their financial activities. For lower interest rates, you may be assigned a debt consolidation professional to help you improve your credit score however loans in that case are only open to union members.
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.
Depending on corporate credit history, profit and time in business, a business may qualify to have a loan solely in 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.
Loan sources also stem from insurance holding companies. These firms enter into partnerships with car dealerships, giving the buyer an option of accessing a certain amount of financing as they prospect for their desired car. They work with the dealer in underwriting any debt incurred upon sale of the vehicle. The buyer therefore must be immediately answerable to the underwriting firm to whom the outstanding payments are made. Single car purchases may not sit well when bought in this fashion but a provision for business auto loans lets the buyer access the advantages of enterprise packages.
Once approved, it is easier for you to bargain with the car dealer for the best possible transaction. It becomes harder for the seller to push you towards a deal in his/her favor. Prospecting for hybrid vehicles makes you eligible for business tax credits, namely energy efficiency. These tax credits are claimable through an E-loan application, along with citing the necessary documents indicating your reasons for tax compensation. Environmentally friendly vehicles are eligible for a number of discounts giving the business the ability to exploit the many advantages given by the federal government.
The lender that offers discounts for both used and new car purchases lets you expand your working assets while freeing the cash on your portfolio. Looking for a provider who offers you enough advantages for your business health helps with your balance sheet.