This article is part of a larger series on Business Financing.
When looking for a business auto loan, there are many factors a small business needs to consider before applying for financing. For example, a business should look at how much it needs to borrow, the maximum term of the loan, the interest rate offered by the lender, any specific requirements regarding the age and mileage of the vehicle, and minimum annual revenue and time-in-business requirements.
By using a business auto loan, companies can manage cash flow by spreading the cost of large asset purchases out over a period of time. Depending on what a business is trying to finance, either a business auto loan or equipment loan might be the right choice. For example, some lenders will only finance large commercial vehicles under equipment loans rather than business auto loans.
Here are our eight choices for the best business auto loan providers:
- Bank of America: Best overall—low rates without funding restrictions on dealership vehicles
- Wells Fargo: Financing for dealerships and private vehicles
- Crest Capital: Online lender with terms similar to traditional banks
- U.S. Bank: Companies in the West or Midwest that need new or used vehicle financing
- PNC Bank: Established East Coast businesses that want low-cost financing
- Celtic Bank: Funding up to $5 million for a fleet of vehicles
- National Funding: Borrowers with low personal credit scores
- South End Capital: Businesses looking for equipment loans rather than a traditional auto loan
Bank of America
Bank of America is the best overall choice for a business auto loan due to its low starting annual percentage rate (APR), lack of funding restrictions, and easy-to-meet qualifications. You can finance a vehicle with up to 75,000 miles that’s up to five years old and have funding in one to three days. The only drawback is that older vehicles or higher-mileage vehicles may not qualify. Borrowers looking at higher mileage vehicles should consider Wells Fargo or Crest Capital for business auto financing. You can visit Bank of America’s website or stop into a branch location to get the application process started.
Wells Fargo is another excellent choice for a traditional lender providing business auto loans. The starting rates are a little higher than Bank of America, and the $100,000 loan maximum might not be enough to meet every business’ need. Otherwise, the terms and qualifications are borrower-friendly. You can visit the Wells Fargo website or stop into a branch to apply for business auto financing.
Crest Capital is an excellent choice for businesses looking for an online lender with terms similar to a traditional lender. Crest Capital promises funding in as soon as four hours for loan amounts of less than $250,000. However, additional documentation is required for loans of more than $250,000, which slows down the application process.
Crest Capital’s requirements are a little more stringent than the first two lenders on our list, with the lender listing a minimum credit score and time in business requirement. To apply for business auto financing with Crest Capital, visit its website.
For businesses located in the Midwest and western parts of the United States, U.S. Bank is an excellent choice for a traditional lender. You can get financing of up to $250,000 with up to 84 months to repay the loan. The factors that push U.S. Bank down the list are the regional nature of the bank combined with higher credit score and time-in-business requirements than other lenders on this list. To apply for a loan with U.S. Bank, visit its website or stop into a bank branch.
If your business is located on the East Coast, PNC Bank is a good choice for business auto financing. Its terms are very similar to U.S. Bank’s terms. You can borrow up to $250,000 for up to 72 months. However, PNC Bank does have some of the most stringent time-in-business requirements, as your business must be operating for at least three years to qualify. Bank of America, Wells Fargo, and South End Capital are lenders on this list that have no minimum time-in-business requirements. To apply for business auto financing with PNC Bank, stop by a bank branch or click on its website.
Celtic Bank works with the Small Business Administration (SBA) to provide loans for fleet purchases. The SBA provides a partial guarantee for Celtic Bank business loans. This allows for very low rates on large loans. It offers the largest loans on our list, at up to $5 million. However, because Celtic Bank works with the SBA and offers large loan amounts, more strict qualification and documentation is required. For more information on this financing option, check out Celtic Bank’s website.
For business owners with bad credit, National Funding is a good choice for business auto financing. Interest rates on these loans are higher, so borrowers with strong credit profiles should shop around for the best rates. You can borrow up to $500,000 for up to five years. Businesses must be in operation for at least six months and show an annual revenue of at least $250,000. Visit National Funding’s website to apply for business auto financing.
South End Capital
For businesses looking for auto financing that might fall into the equipment category, South End Capital is an excellent choice. It’s also a good choice for lower credit borrowers as the minimum credit score needed to qualify is 625. Qualified borrowers can borrow up to $5 million for up to 60 months. There are a variety of repayment schedules available.
It should be noted that the origination fees range between $399 and $599, which are higher than those of some lenders on this list. However, there are no minimum time-in-business requirements, which makes it a good choice for startups. Stop by South End Capital’s website to apply for equipment financing.
How We Evaluated Business Auto Loan Providers
When comparing the best business auto loan providers, we analyzed several factors to find the lenders that provided the best terms and services.
The criteria we used to evaluate the best business auto loans were:
- Rates and fees: Collateral for the loan is the vehicle being purchased—lower interest rates than other types of business financing
- Loan amounts: The total amount that can be borrowed to purchase the vehicle
- Repayment terms: How often payments will be due and the maximum repayment term
- Qualification requirements: What credit score, time in business, and annual revenue requirements each company has
- Vehicle restrictions: The age and mileage limits put in place by each lender
- Speed of funding: How quickly the loan will be approved and how long it’ll take to receive funds
Business auto financing provides companies with affordable financing for individual vehicles, fleets of vehicles, and even equipment financing. Each lender on this list has different qualifications and terms, so you should compare rates and terms from multiple lenders before deciding where to apply for financing.