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If your company relies on one or more vehicles, a business auto loan can be an affordable way to buy a car, van or truck, or refinance one you already own to save money. Business auto loans come with built-in collateral — the vehicle itself. That means business auto loans may cost less or be easier to qualify for than other small-business loans, and depending on the lender, you may not have to provide a personal guarantee to secure the debt.
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Best business auto loan lenders
Select a lender to jump to details about its offerings, or keep reading to learn more about the best business auto loan options and rates.
Bank of America Business Advantage Auto Loan
Best for: Business owners who want to lock in a rate while shopping for a vehicle.
Key facts:
- Loans starting at $10,000.
- Terms ranging from 48 to 72 months.
- APRs starting at 6.79%.
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 two years. 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.
Read our full Bank of America business loans review.
PNC Small Business Vehicle Finance Loan
Best for: Business-use passenger vehicle.
Key facts:
- Loans from $10,000 to $250,000.
- Terms up to 72 months.
- Fixed interest rates.
PNC offers line of credit 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 two years 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.
Read our full PNC Bank business loans review.
Ally Business Auto Loan
Best for: Business auto loans with no personal guarantee.
Key facts:
- Option for no personal guarantee.
- Funding can be used to modify existing commercial 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 will finance 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 Commercial Vehicle Financing
Best for: Large commercial and specialty vehicles.
Key facts:
- Up to 100% financing for some specialty vehicles.
- Terms ranging from 12 to 84 months.
- Fixed interest rates.
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.
Read our full Wells Fargo business loans review.
Truist Small Business Auto and Commercial Vehicle Loans
Best for: Longer loan repayment periods
Key facts:
- Loan amounts up to $250,000.
- Terms up to 84 months.
- Interest rate discounts for business checking account holders.
Truist Bank offers small-business auto loans with terms up to 75 months and commercial vehicle loans with repayment periods of up to 84 months. The loans can be used to purchase or refinance vehicles such as cars, vans, SUVs and light trucks. 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.
National Funding Equipment Financing
Best for: Startups and borrowers with bad credit.
Key facts:
- Loan amounts up to $150,000.
- Terms ranging from 24 to 60 months.
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 six months in business. Credit requirements are also more lenient than some other lenders — its minimum FICO score is 575 — making National Funding a good choice if you're exploring small-business loans for bad credit.
Read our full National Funding review.
Navy Federal Business and Commercial Vehicle Loans
Best for: Best for veteran business owners
Key facts:
- Loan amounts starting at $40,000.
- No fees or prepayment penalties.
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.
Read our full Navy Federal business loans review.
» MORE: Best credit union business loans
Balboa Capital Equipment Financing
Best for: Same-day funding for commercial trucks.
Key facts:
- Loan amounts up to $500,000.
- Approval in as little as one hour.
- Terms ranging from 24 to 60 months.
Balboa Capital is an alternative lender that specializes in equipment financing. It offers financing for commercial trucks, semi-trucks, dump trucks, 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, $100,000+ in annual revenue and a FICO score of 620 or higher.
Read our full Balboa Capital review.
» MORE: Best same-day business loans
Crest Capital Vehicle Financing
Best for: Hard-to-finance trucks or specialty vehicles.
Key facts:
- Loan amounts between $5,000 and $500,000.
- Fixed interest rates.
Crest Capital is an alternative lender that can be a good choice if the vehicle you want to buy or lease won’t qualify for traditional funding. Only fixed-rate loans are offered with no requirement to requalify annually.
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 also finance corporate cars and SUVs in the business’s name, but you must have at least five years in operation, 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.
JR Capital Equipment Financing
Best for: Heavy truck loans and leases.
Key facts:
- Terms ranging from 36 to 72 months.
- Rates start at 5.99%.
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.
What is a business auto loan?
A business auto loan, also known as a commercial auto loan or business car loan, is financing you can use to buy a vehicle for your company. These loans typically cover cars, vans and some trucks. You’ll likely need an equipment loan or commercial truck loan for a heavy-duty vehicle.
A business loan from a bank will typically have the lowest rate. If you already have a business account with a bank, you might start by seeing what rate it will offer you on a business auto loan. Alternative lenders may charge more, but their vehicle loans can make sense if you can’t qualify with a bank or need funding quickly.
How to get a business auto loan
- Find the right vehicle. This means not only the type of vehicle that fits your business’s needs, but also one a lender will approve. For example, if you want to finance a used car, many lenders will have specific mileage limits and won’t approve a vehicle that’s more than five years old due to the depreciation.
- Compare offers. If your company has a relationship with a financial institution, it can make sense to see if it offers business auto loans. But as with other types of business loans , you may pay less by shopping around. Look at a lender’s APR and details like how much you can finance. If it’s less than 100% of the vehicle’s total cost — don’t forget expenses like taxes and registration — you’ll need more cash on hand.
- Apply with a lender. Lenders will have different application procedures. The process may be time-consuming and require paperwork like a business license, business tax ID and information about all the business’s owners. If you’re in a rush, alternative lenders may offer a more streamlined application process, but also more expensive loans.
Business auto loan rates
Business auto loan rates vary depending on factors like the applicant’s income, personal credit score, length of time in business and length of financing term. Because business auto loans use the vehicle itself as collateral for the loan, the age and condition of the car may also affect the rate you get.
Banks typically offer the best rates, but they can be tricky to qualify for. Bank business auto loan rates can range between about 4.5% and 14% depending on several factors. Alternative lenders, on the other hand, may be easier to qualify for, but charge higher rates.
Business auto loans vs. leases
Lenders may offer both business auto leases and loans. Consider a loan if you want to own the vehicle outright in the long run. However, a business auto lease may make sense if:
- You need to free up cash flow. If you’re worried about fitting a car’s costs into your operating budget, auto lease payments are often lower than loan payments. You may also be able to spread the sales tax over the repayment term, depending on where you live. But you could pay more in insurance, and overall, for a lease.
- You don’t want to be stuck with a car. If having the latest car model is important to your business, a lease gives you the opportunity to switch to a new car at the end of your term You also have options to get out of a car lease — like swapping it for a new one — if the vehicle doesn’t end up fitting your company’s needs.
- You know how you’ll use the car. Your lease agreement will dictate what you can do with the vehicle, both in terms of how many miles you can drive and whether you do simple modifications, like wrap the outside. If you plan to substantially upfit the car, or run it into the ground, buying may be the better option.
» MORE: Car lease calculator
Business auto loans vs. personal auto loans
Business auto loans are similar to personal auto loans: You get money to buy a vehicle and repay that amount plus interest over a set term. But there are some notable differences:
- The vehicle is for business purposes. Small-business owners’ personal and professional lives often blur, but business auto loans are meant for vehicles used by your company. When you apply, the lender will likely ask how you’ll use the vehicle and you may need to provide documentation like a business plan or company financial statements.
- The vehicle can be in your business’s name. For qualified borrowers, some lenders will let you put a business auto loan in your company’s name only. This can protect your personal credit or assets should your business be unable to repay the debt. In other instances, you’ll need to provide a personal guarantee for the loan as collateral.
- Potential tax deductions are available. If you buy or lease a business vehicle, you can deduct its ownership and operation costs. Owners can also deduct a car’s depreciation. There are multiple ways to do this; using the standard mileage rate, actual expenses or possibly Section 179 of the tax code could allow the entire deduction all at once, though that amount varies based on factors such as vehicle type and when it was placed in service.
» MORE: Car loan calculator
Alternatives to business auto loans
In addition to a business auto lease, other alternatives to business auto loans include:
SBA 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.
Business lines of credit are revolving sources of capital that can be used to purchase a vehicle for your business. With lines of credit, you only pay interest on the money you’ve used, and you can redraw what you’ve paid back. Business lines of credit are offered by banks and online lenders, and online lenders usually offer the easiest approval terms.
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.
NerdWallet editor Ryan Lane contributed to this article.