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Our simple application takes less than 5-7 minutes to complete.
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Choose the offer that best fits your needs by comparing loan amounts and terms.
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Finalize your loan offer with the lender you selected to receive your funds.
Although more and more businesses are moving their operations online and leveraging logistics services offered by other organizations, some companies still require their own vehicles to get from point A to B. Cars, vans, and trucks can be expensive, however, leading many business owners to explore other avenues when acquiring new vehicles. Business auto loans can be an ideal solution for some businesses, but not everyone is likely to get approved. Read on to discover everything you need to know about this form of financial arrangement.
If you’re unfamiliar with the concept of a business auto loan, it’s essentially a financial arrangement in which a bank or other lender provides a business owner with the funds they need to purchase a vehicle for company use. Business auto loan interest rates are generally lower than they are with traditional loans because the vehicle serves as a form of collateral. Regardless, getting approved for one of these loans often boils down to the quality of an applicant’s individual credit history.
A business auto loan with a personal guarantee is a legal commitment made by a business owner or a co-signer, to take personal responsibility for repaying the loan if the business cannot meet its repayment obligations. It means the personal assets and finances of the guarantor can be used to cover the loan amount, interest, and any fees or penalties if the business defaults on the loan. A business auto loan with a personal guarantee is common in lending, for small businesses or startups with limited credit history or financial stability. Lenders use personal guarantees to reduce their risk and increase the likelihood of loan repayment. However, they also expose the guarantor to personal financial liability in the event of loan default.
Some business auto loans require what is known as a personal guarantee. Essentially, this a written promise from a business owner (or company executive) that guarantees repayment of an unsecured loan. Applicants with high credit scores, however, are more likely to get approved for business auto loans without personal guarantees, but some lenders require these guarantees no matter what.
Auto loans for business owners come in a variety of amounts, ranging from a few thousand dollars to a few hundred thousand dollars. Yet if you’re like most small business owners, you’ll probably need less than $50,000 to fund a new vehicle. Most lenders in this space are able to accommodate such needs.
A personal guarantee for a business auto loan is typically required in the following situations:
The reason getting a business auto loan with no personal guarantee can be challenging is because many lenders require a personal guarantee to mitigate their risk. However, there are some strategies to secure a business auto loan without a personal guarantee:
Each lender has its own lending criteria, and securing business auto loans without personal guarantee is not guaranteed. Explore your options while improving your business’s financial profile. Consulting with a financial advisor or business loan specialist can also provide valuable guidance in your pursuit of a commercial auto loan with no personal guarantee.
Different lenders have different terms when it comes to repaying auto loans. Some institutions charge higher interest rates than others, while other lenders give you more time to pay back the amount. Generally, however, when it comes to the length of time borrowers have to repay an auto loan, the typical span is 2 to 5 years. And when it comes to interest rates, APRs can be as low as 3% or 4%, but most lenders charge closer to 8% or more.
In order to get approved for small business auto loans, entrepreneurs must satisfy a set of criteria outlined by a lender. Typically, this is based on an applicant’s credit score, but other factors may also play a role. For instance, if your credit score isn’t very high – but you have a substantial amount of money to apply as a downpayment – that could make it much easier to secure an auto loan. Additionally, some lenders require borrowers to earn a predetermined level of income in order to get approved for an auto loan, but this amount can vary substantially based on the lender.
Business auto loans can be secured from a variety of sources, including banks, credit unions, and online lenders. Here’s a look at two popular lenders and how they stack up against one another.
Since 2007, OnDeck has been a leading online lender that provides funding to small businesses. More recently, OnDeck began partnering with traditional brick-and-mortar banks to deliver term loans and lines of credit to entrepreneurs and other business owners. It’s also important to note that, rather than basing lending decisions solely on a borrower’s credit score, OnDeck evaluates a business’s overall performance.
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| Loan Amounts | $5,000 to $500,000 |
| APR Range | As low as 9.99% |
| Repayment Terms | Term loans up to 3 years |
| Time to Funding | As fast as 1 day |
| Click “Check Rates” to apply to OnDeck Check Rates | |
» MORE: OnDeck Small Business Loans Review
StreetShares provides small businesses with financing even if the business owner is unable to secure the loan with collateral. Many aspiring borrowers who get turned down by other lenders can still get access to funds through StreetShares.
 Term Loan |
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| Loan Amounts | $2,000 to $250,000 |
| APR Range | 24.00% to 99.00%% |
| Repayment Terms | Up to 3 years |
| Time to Funding | Typically 1 – 5 days |
| Click “Check Rates” to apply to StreetShares Check Rates | |
» MORE: StreetShares Small Business Loans Review
If your company could use a new set of wheels, a business auto loan could be your best bet. Explore your options by applying to either of the above lenders.
Yes, you can get a car loan with your EIN (Employer Identification Number) rather than your social security number (SSN). However, there are some important considerations:
The credit score you need for a business car loan depends on the lender and the specific loan program. A good credit score is typically required to qualify for favorable loan terms. A 700 or higher credit score is considered a good range for securing a commercial auto loan with no personal guarantee and competitive interest rates. Some lenders offer loans to borrowers with lower credit scores, but interest rates and terms may be less favorable. Your business’s financial stability, revenue, and the vehicle’s purpose may also influence the decision.
Well-known traditional banks offer commercial vehicle loans but approval depends on your creditworthiness, interest rates, loan terms, and the size of your business. Make sure to explore credit unions and online lenders like PrimeRates because they offer competitive commercial vehicle loan options. Consulting with a financial advisor or loan specialist can help you make an informed decision.
Yes, you can use a business line of credit to purchase a car for your business. A business line of credit provides flexibility, allowing you to draw funds as needed up to a predetermined credit limit. You can use the funds to finance various business expenses, including buying vehicles. Consider the terms and interest rates associated with your business line of credit, because they differ from traditional auto loans. Using a business line of credit for vehicle financing may impact your available credit for other business needs.
Interest rates on commercial vehicle loans can be higher compared to personal vehicle loans, and the specific rate you’ll receive depends on your creditworthiness, the lender’s policies, and the loan terms. Traditional lenders may perceive commercial vehicle loans as riskier due to the associated business expenses and potentially higher loan amounts. To get a more favorable interest rate, you need a strong credit history, an established business, and solid financial standing.
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