Business Auto Loans: How to Qualify and Best Options

Bank of America business auto loans can be used to purchase or refinance cars, vans and light trucks. If you haven’t found the right vehicle yet, Bank of America locks in your business auto loan rate offer for 30 days. This gives you time to shop around before you commit to a loan.

You must have been in business for a minimum of 24 months. The vehicle can’t be older than five years and must have a minimum value of $10,000 and mileage of less than 75,000 miles.

PNC offers a business line of credit for financing for new and used passenger vehicles. In some cases, you may be able to finance the entire amount of the vehicle purchase price. You can apply over the phone or at a PNC Bank branch.

In general, PNC likes businesses to be in operation for a minimum of 24 months under the same ownership, but may have different options for newer businesses. Automatic payment from your PNC business checking account is another requirement for PNC auto loans. Collateral is required for business-use new or used passenger vehicles.

Ally Bank offers a commercial line of credit for borrowers who want to buy or lease business vehicles. Leases can be open-ended with flexible terms or closed-ended with fixed terms. Specific loans for heavy-duty trucks and vehicle modifications, like adding a crane or towing equipment, are also offered. Also, Ally offers options to buy or lease the vehicle in the name of your business which could help you keep the debt off your personal credit report and protect you from liability related to the use of the vehicle.

Vehicle requirements vary based on the financing option you use. Ally finances used vehicles that are less than 10 model years old, and have no more than 120,000 miles. When leasing a used passenger vehicle, it can’t be older than two years.

Wells Fargo offers commercial vehicle financing, refinancing and leasing for many different types of large commercial-use vehicles. Its truck financing, for example, is for new or used Class 6-8 trucks, which are generally medium-sized trucks to heavy-duty trucks that require commercial driver’s licenses. It offers lines of credit and term loans, and also leases new and used semi-trailers from its own inventory. Financing for specialty vehicles includes everything from dump trucks to recycling haulers to document shredder trucks, and seasonal payment structures may be offered. Loan amounts will depend on the type of vehicle you’re financing.

Details related to qualification for commercial vehicle financing are not available on the lender’s website. Wells Fargo typically requires a business be in operation for a minimum of two years for many of its products, although there are exceptions.

National Funding is an alternative lender with commercial vehicle financing and leasing for commercial cars, vans, trucks and taxis. Its eligibility criteria are less strict than some other business auto loan providers, allowing more business owners to potentially qualify.

National Funding may be a fit for startup financing as it requires only 6 months in business. Credit requirements are also more lenient than some other lenders — its minimum FICO score is 600 — making National Funding a good choice if you're exploring equipment financing for bad credit.

A longer loan term will generally offer a lower monthly payment for your business than a shorter term. This can be helpful for small businesses operating on a tight budget. However, longer loan terms typically have higher interest rates than those with shorter terms.

Small-business auto loans and commercial vehicle loans are subject to credit approval and standard underwriting guidelines apply. Specific borrower requirements and vehicle limitations are not available on the Truist website.

Navy Federal Credit Union offers business and commercial vehicle loans to its business members. Business vehicle loans can be used to purchase or refinance cars, light-duty trucks and SUVs. Commercial vehicle loans, on the other hand, are used only for purchases (no refinances) of commercial, heavy-duty or specialty trucks and vans, and semi-tractor trailers.

Borrowers must be NFCU business members. Navy Federal Credit Union membership is open to servicemembers in all branches of the armed forces, including veterans and retirees; immediate family of military members; and Department of Defense civilians. When buying a used vehicle, NFCU used the CARFAX Vehicle History Report to determine qualification of a used vehicle.

Balboa Capital is an alternative lender that specializes in equipment financing. It offers financing for commercial trucks, semi-trucks, dump trucks, cargo vans, flatbed trailers and other vehicles. Many alternative lenders provide faster funding than banks, and Balboa is no exception. The lender has an online application, offers approval decisions in an hour during regular business hours and says it can provide same-day financing after approval.

Minimum lending requirements include at least one year in business, $100000 in annual revenue and a FICO score of 620.

It considers most new and used work-specific trucks, vans or specialty vehicles, including ambulances, hearses, fire trucks, cranes, boom trucks, concrete mixers, water trucks and other specific-use trucks. Crest Capital excludes vehicles used as taxis services and transportation company tractor trailers.

Crest will finance corporate cars and SUVs in the business’s name, but your business must have at least five years in operation, and all owners of 20% or more must have at least a 700 credit score and own a home to qualify. Crest Capital doesn’t have vehicle mileage or age restrictions and will finance vehicles sold by private parties; however, to qualify to finance in the business name alone, the vehicle can’t be older than three years old, with no more than 125,000 miles and a maximum value of $150,000.

JR Capital finances a variety of heavy vehicle types such as sleeper, day cab, dump, tow and utility trucks as well as different types of semi-trailers, grain trailers, flatbed trailers and tank trailers. A down payment isn’t required and you have the option to buy from any dealer or private party.

JR Capital requires that used truck models be from 1990 or newer, but other details, like borrower requirements, are not available on the website.

eLease is a good option for businesses with poor credit that don’t meet other traditional qualification requirements. It offers flexible equipment financing options with low fees, rates between 7.5% and 22% and repayment terms up to 72 months.

eLease can work with startup businesses, has a minimum credit score requirement of 550 and has no minimum revenue requirements.

SBA commercial vehicle loans are loans issued by private lenders but backed by the federal government. They include SBA microloans, 7(a) loans, Express loans and 504 loans, most of which can be used to purchase a vehicle, as long as its use is for business purposes. SBA loans offer competitive rates and low fees, but can take a while to fund.

Depending on the type of vehicle you need to finance, a line of credit may not cover the full amount — business credit lines typically hover around $100,000 to $200,000. Certain types of businesses may qualify for an SBA line of credit up to $5 million.

If you can’t qualify for a business auto loan or your vehicle will be driven more for personal use, consider a consumer auto loan. This won’t come with benefits like building business credit, but personal auto loans are widely available, even if you have bad credit.

You can typically use the proceeds from a personal business loan on whatever your company needs — including vehicles. But these loans will likely be more expensive than any other business auto loan option, making them a last resort for financing a vehicle purchase.