If you are a new business owner in need of a fleet of vehicles or a self-employed individual who needs a business car to get you around, you should find a low cost commercial auto loan to help you meet your goals. In light of today’s economic woes it is most likely that you are working within budget restraints. This means that you will need to locate a commercial auto loan that offers you low monthly payment options and reasonable interest rates.
The easiest way by far to locate a low cost commercial auto loan is to use the internet. There are many lending institutions working online who offer this type of loan. The application process can be done online and it is very similar to the application process you must go through when you apply for a personal loan. You will need to provide the lender with your means of income, the amount of money you make, a list of your debts and so forth. However, the terms may be different on a commercial auto loan compared to those associated with a personal loan. Quite often the terms are for long periods of time and the interest rates are lower than what they are for personal loans.
When shopping for a commercial auto loan take as much time as necessary to find a lender offering the best terms and the lowest interest rates. The interest rates charged by the various lenders could very well differ by as much as 2%. Even 2% can over-extend your budget, especially if you are financing a vehicle(s) that costs tens of thousands of dollars or more. Lenders offering these loans generally approve the loans very quickly as they know that new business owners are anxious to purchase their fleets. Therefore, avoid the lender that tells you it will take a long period of time to receive approval for your commercial auto loan. After all, it is a buyer’s market today when it comes to getting loans of all types and lenders are competing fiercely for your business.
If your business is new you will have to explain your marketing plans to some lenders so that they can determine whether or not you are worth taking a risk on. If your business has been in existence for a while you will have to prove that your business is profitable in order to receive a commercial auto loan. You also will have to prove that you hold more than 20% ownership in the business and have an acceptable credit history. Most lenders will ask you to provide them with both business and personal financial records before approving you for a commercial auto loan so be prepared to show your documents.
You will find it much easier to become approved for a commercial auto loan if you have some form of collateral. This is because lenders are much more willing to lend money to a business if there is a secondary source for them to be able to use to recover their money. Your collateral could be sold off to recover the money that the bank gave you in case you default on your commercial auto loan.