What's The Process For Getting A Business Vehicle Loan?
Commercial vehicle loans are a popular choice for business owners who want to grow their business. But if you’re new to the process, you may wonder exactly what the process looks like. Here’s the step by step guide to the process.
1. Determining your needs
The choice of business vehicle varies wildly depending on your business needs. A cleaning service might work well with a hatchback to get staff to and from clients, whereas a towing company will obviously need a truck with towing capability and a fair amount of heft. You, as the business owner, will already have a good idea of what you need.
That said, common considerations include:
- Are you planning to buy new or used?
- Will the vehicle depreciate rapidly? Does that matter for your business plans?
- What are the maintenance considerations?
- What is the fuel economy?
- What warranties and insurance will you want or need?
- How much will this vehicle cost?
You should also put some thought into the business proposition for these vehicles. Lenders will typically want to know the purpose of the vehicle(s) you want to buy. A solid, well-explained business case will help with approval.
2. Apply for a loan
Once you have a vehicle or set of vehicles in mind and know how much you’ll need to borrow, you can begin your loan application.
At this point, you have the choice of going through a broker or going to a lender directly.
- A business loan broker will help you find the right lender for your business needs. They may go to main banks or specialist lenders, depending on where they think they can get you the best deal. They don’t take payment from you, rather they get commission from the lender you end up signing with.
- If you want to work with a particular lender (perhaps one you have already worked with), you have the option of going direct. You approach the lender yourself for your vehicle loan application.
In either case, you will need some supporting documentation and information:
- Driver’s license
- Financials or six month’s bank statements
- Details of the vehicle, including VOSA, VIN and registration
- Insurance, RUC if applicable and current WoF
3. Wait for approval
Once your application is submitted, it’s over to your lender. They will check the information you have provided and come back to you with an offer.
Your offer will include:
- The interest rate
- The term of the agreement
- The conditions of the loan (including any fees)
- Any security requirements (usually a specific security agreement or a general security agreement)
You can read more about security requirements in our dedicated guide.
If you have gone through a broker, you may have several offers to consider.
4. Funds released
If you are happy with the agreement for the commercial car loan, sign on the dotted line. Your funds will be released to the vehicle owner within 24 hours.
Start a 2-minute commercial vehicle loan application with GetCapital and get funded in less than 5 days. Start here.