How Are Personal And Business Car Loans Different?

When you get a personal car loan or another personal loan, your credit record plays a huge role in whether you get approved, how much of a down payment you need, and how much interest you will pay. Typically, if your credit is good, you have a stable job, and you make enough money to cover the car payment, you won’t need a cosigner or collateral to get a loan to purchase your car. Most likely your loan for a personal vehicle will be approved immediately, and you can leave the dealership with your car knowing that your lender will forward the check to the car dealer ASAP. Getting a business vehicle loan is somewhat different, as there are some additional criteria you will need to meet to qualify for a loan when purchasing a vehicle for a business.

Getting Approved for a Business Vehicle Loan

When you purchase a vehicle for business purposes, expect the bank or lender to run a business credit check and a personal credit check. If your business is new, your credit and business assets may be limited. By checking your credit record, the lender can assess how you have handled your personal finances over time. If your credit check shows that you have a habit of making payments on time, that could help you get the loan to purchase a business auto. Even if your business and personal credit histories are sound, you can usually expect higher interest and a shorter time to pay off a commercial vehicle loan.

Find a Lender that Specializes in Commercial Loans for Vehicles

When your business is new, there are options to help you finance a vehicle. There are lenders that specialize in loans for fleets or cars or other vehicles used for business. These lenders can help you maximize your assets to get the cars you need to keep your business running. To help build your credit history, you might choose to lease rather than buy. An auto dealer who has experience with commercial loans for cars can usually help you find financing to fit your needs.