A business car loan, also known as a commercial car loan, is a type of finance that you can use to purchase a vehicle for your business.
Cars, vans, and certain types of trucks are covered by these loans. Business car loans are similar to personal car loans in that you borrow money to buy a car and then repay it over time, plus interest.
People and businesses seeking financing for vehicles to be used in their businesses or for their workers are eligible for car loans.
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Business car loans come in a few different varieties that work in different ways. What they all have in common is that they allow you to get the vehicles you need to conduct your business without having to pay for the full cost up front. This frees up funds to be used for other business needs. You then make regular repayments to the lender which can be funded with business revenue.
When you’re buying a car you have two options. Either pay cash for it upfront or finance it with a loan. While car finance might be something you’ve shied away from in the past, there are some advantages of going with this option.
You can get a loan for the entire cost of the vehicle. You don't have to wait until you've saved up all or even a portion of the money if you need a car right now. In just the time it takes to prepare your vehicle and organise the paperwork, you can drive away in a new automobile. Car financing makes a lot of sense if the monthly loan payments are affordable.
Vehicle financing may be tax deductible. If you own a business and it borrows money to buy a company car, the finance charges may be tax deductible. Check with your accountant, but typically you can deduct interest on a car loan, insurance payments, repairs, and maintenance, among other things.
You can put your money towards more vital things. Spending a substantial chunk of money on a car upfront isn't always the greatest decision, particularly if you have a family or a company to support. You may need the money in the future for an unforeseen event, such as a medical bill or a business emergency.
A chattel mortgage (also known as a bill of sale or equipment loan) is a financial arrangement in which money is borrowed to acquire commercial equipment or vehicles, and a charge is taken over the financed equipment, meaning the lender can repossess it if the borrower misses repayments.
A finance lease is a vehicle financing arrangement in which the lender keeps the title and the car is leased to the borrower for a certain period of time at a set rental price.
Most commercial equipment can be financed, including:
The most common kind of equipment financing is a chattel mortgage. With a chattel mortgage, you source the equipment and your company owns it from the start of the loan period, allowing you to keep your operating capital free. The loan is secured against the acquired equipment, and if the equipment is employed to generate revenue, your company can usually claim interest and depreciation.
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We have both Chattel Mortgage and vehicle leasing options from a variety of lenders to suit your needs.
Our lending specialist can save you money by comparing multiple options and finding the best value.
We know from the start exactly what we need to get you through the approval process and into your vehicle fast.
Our simple process takes the hassle out of getting a car loan because we do the hard work for you.
To get a business car loan, you must:
You may be required to give the following information when applying for a car loan:
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Yes, a business car loan can be used to purchase a used vehicle. Many lenders, though, set an age limit for the vehicles they will finance. Some are as low as five years old, although some lenders are prepared to finance vehicles as old as 12 years. Many traditional lenders may turn you down if your automobile is vintage. However, there are also plenty of financiers that specialise in classic automobiles.
Yes, tax benefits are one of the main reasons that people employ a business car loan. In the year the asset is acquired or used, eligible firms can claim an immediate deduction for the business share of the vehicle's cost. Other tax deductions you may be able to claim, at least with chattel mortgages, are:
Lenders want you to buy a reliable vehicle. For that reason car loans typically have a $5,000 minimum lending amount. They often have upper limits too, typically around $250,000.
Yes, most lenders will allow you to incorporate a balloon into your business car loan. Businesses are one of the main users of balloon payments, because it allows them to keep their repayments low while the vehicle is being used, and then pay off the balloon with the proceeds
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