There is a fundamental difference for taking a loan for a car for your personal use and a car for your business. The terms are different for business car loans as compared to a normal loan for a car which is generally used for personal use. You find that in many cases these business car loans are approved faster, it can be in 24 hours flat. You can get a pre-approved loan for this so that you are at a convenience of bargaining when you shop for your car.
Collateral Required for Both Types of Loans
You find that both these loans require collateral, that is, assets, which can help you secure the loan. Collateral can include investments and real estate. A business car loan can also be collateralized by furniture, equipment and fixtures or even by an inventory. Besides this, a business loan can also require business owners to make the personal assets available as collateral.
Guarantor is an Additional Requirement
You find that any other loan does not require any guarantor to sign, but for a business loan this is required. A guarantor will be able to guarantee that the repayment of the loan on time, and if this does not happen, then the bank or the financial institution can demand the loan repayment from the guarantor.
Assessment of the Credit Reports
With a business car loan the credit reports of the business need to be assessed and the financial statements for the last three years will need to be produced by the business. There are times when the financial institutions require a professional accountant to compile these reports. These financial institutions also might require the copies of contracts with different vendors, tax returns and other contracts. In short, the documentation required for a business car loan is much complicated as compared to the consumer loan.
Knowing the Terms of Business Car Loans
- You find that the terms of these business car loans are much shorter as compared to the terms of consumer loans but these loans include a higher rate of interest.
- This depends on the availability of the collateral and also on the time the business has been operating.
- If you get the business car loan only with an inventory, the interest rates work out higher with a shorter term as compared to a loan which is secured by real estate.
- You have business loans which have a call feature where the financial institution is able to call the loan which is due at a certain time. At such time, the business owner needs to pay the total outstanding amount which is due.
Advantages of Business Car Loans
- You have a number of companies which offer you these loans at reasonable interest rates with options that are customized in accordance with your business.
- You have the advantage of ownership of the vehicle, titled in the name of the business, there are no restraints where the mileage is concerned and you also have the ability to sell or trade in your vehicle at any given time.
- The funds are transferred to your car vendor or dealer once the formalities are complete. You can think of tax benefits as this car will be used for business.
- The repayment can be made directly through cheque or even in person. You can look for a finance company which can work beneficial for your business car loan with reasonable interest rates and easy mode of payments.
- You can think of applying online after you have gone through the various terms and conditions so that you are ensured of a convenient business car loan without having to face any problems.
This blog help people who are looking for business car loan. Get in touch with us to get more information about business car loans.