Best Business Auto Loans For Small Businesses In 2023

Get Started With BusinessLoans.com

Pros

High borrowing amounts
No minimum credit score
Quick & easy application process

Cons

Limited fee disclosures on website
Funding can take awhile to disburse

Why We Chose BusinessLoans.com For Best Auto Loans

As a loan aggregator, BusinessLoans.com allows borrowers to apply to its entire network of lenders with a single application. This efficiency also increases the chances of getting financing since, even if five out of six lenders turn you down, you’re still getting at least one offer with your application.

This also allows BusinessLoans.com to be more lenient when it comes to credit ratings–there’s no minimum to apply.

BusinessLoans.com Services

BusinessLoans.com works with lending partners to provide a wide variety of services, including:

Term loans
Short-term loans
Lines of credit
Merchant cash advances

Borrowing amounts range from $5,000 to $3 million.

BusinessLoans.com Rates & Fees

BusinessLoans.com’s rates and fees vary depending on the lender you are paired with.

BusinessLoans.com Eligibility Requirements

While BusinessLoans.com may still be able to connect you with funding even if you don’t meet these requirements, you’re more likely to get funding if you do:

Time In Business: 6 months
Business Revenue: $100,000
Credit Score: No minimum

2. National Funding: Best For No Downpayment Auto Loans

National Funding

Get Started With National Funding

Pros

Low credit score requirements
Discounts for repaying early
No collateral required
Fast & easy application process

Cons

Rates can be expensive
Some additional fees charged
Repayments required frequently

Why We Chose National Funding For Best Auto Loans

National Funding is one of the longer-running lenders in the alternative lending market. While much of National Funding’s business is oriented towards short-term loans, it also offers equipment financing options well-suited to vehicle purchases. Best of all, there’s no down payment!

National Funding Services

National Funding offers equipment financing up to $150,000 with terms of 2 to 5 years. National Funding also offers short-term loans.

National Funding Rates & Fees

National Funding’s equipment financing loans start at 4.99%. You’ll also pay an origination fee of 1-3%

National Funding Eligibility Requirements

To get equipment financing through National Funding, you’ll need to meet these requirements:

Time In Business: 2 years
Business Revenue: $250,000/year
Credit Score: 600

3. SmartBiz: Best For Online SBA Auto Loans

SmartBiz

Get Started With SmartBiz

Pros

Rates tends to be inexpensive
No prepayment penalties
Website advertising is clear and informative
Customer service is helpful

Cons

Application process can be slow
Some additional fees charged

Why We Chose SmartBiz For Best Auto Loans

If you meet SBA borrower qualifications and need a $30,000+ business vehicle loan, SmartBiz is a great place to find a loan to purchase a commercial vehicle. SmartBiz works with SBA-approved banks to streamline the SBA loan application process, allowing business owners to apply online with minimal hassle.

Compared to other online lenders, SmartBiz takes a little longer because of the SBA paperwork and processing requirements. Still, SmartBiz is faster than securing a traditional SBA loan from a bank. SmartBiz is also a highly reputable company that discloses all its terms and fees and doesn’t tack on sneaky hidden fees or terms.

SmartBiz Services

SmartBiz offers the following products through its lending partners:

SBA loans up to $350,000
Bank terms loans up to $500,000
Lines of credit up to $150,000
Custom financing up to $500,000
ERC refunds

SmartBiz Rates & Fees

Interest rates for SBA loans range from prime + 2.75% to prime + 3.75%. Term loans have interest rates starting at 8.99%. Custom financing rates start at 6.99%.

SmartBiz Eligibility Requirements

To get equipment financing through National Funding, you’ll need to meet these requirements:

Time In Business: 2 years
Business Revenue: Varies by amount borrowed
Credit Score: 650+

Get Started With Wells Fargo Equipment Financing

4. Wells Fargo: Best Bank For Lines Of Credit

Wells Fargo Equipment Financing	Visit Site

Pros

Suitable for large businesses
Multiple types of financing available
Rates tend to be inexpensive
High borrowing amounts

Cons

Fair public reputation

Why We Chose Wells Fargo For Best Auto Loans

Online lenders can offer a lot of speed and convenience to borrowers, but when it comes to excellent rates, banks still have an upper hand. Wells Fargo stands out from many of its competitors by being more accessible to small businesses when it comes to lending.

Wells Fargo Services

Wells Fargo offers SBA loans up to $6.5 million. It also offers lines of credit up to $500,000 to small businesses with terms of 1 or 5 years.

Wells Fargo Rates & Fees

Interest rates for SBA loans are generally a few points above prime. Lines of credit range from prime + 1.75% to prime + 9.75%.

Wells Fargo Eligibility Requirements

To get funding through Wells Fargo, you need to meet these requirements

Time In Business: 2 years+
Business Revenue: $1.50 in cash flow for every $1 borrowed
Credit Score: 640+

5. Bank Of America: Best Bank For Small Business Auto Loans

Bank of America Business Loans & Lines of Credit

Get Started With Bank of America Business Loans & Lines of Credit

Pros

High borrowing amounts
Multiple types of financing available
Rates tend to be inexpensive
Long-term financing options available

Cons

Borrower qualifications might be hard to meet
Financing isn’t available in some states
Application process is slow and involved
Funds can take time to disburse

Why We Chose Bank Of America For Best Auto Loans

Sometimes you just want a traditional auto loan with competitive rates. If you run a well-established business with excellent credit and need a loan for a vehicle weighing less than 2.5 tons, Bank of America’s auto loans can be an excellent financing option. And if you do need a to purchase a heavier vehicle, you can do so with a Bank of America equipment loan instead.

Bank Of America Services

Bank of America offers business auto loans in amounts starting at $10,000 with term lengths of 48 to 72 months. It also offers:

Business term loans
Lines of credit
SBA loans
Commercial lending
Equipment financing

Bank Of America Rates & Fees

Interest rates for Bank of America auto loans start at 6.19% APR.

Wells Fargo Eligibility Requirements

To get funding through Bank of America, you need to meet these requirements:

Time In Business: 2 years
Business Revenue: $250,000/year
Credit Score: 670

Get Started With Crest Capital

6. Crest Capital: Best For Financing Used Vehicles

Crest Capital	Visit Site

Pros

Few additional fees
Long-term financing available
Fast & easy application process
Good customer service

Cons

Not available to some industries
Rates can be expensive

Why We Chose Crest Capital For Best Auto Loans

Crest Capital is an alternative lender specializing in business vehicle financing, providing an easy online application for business auto leases and loans. Unlike many lenders, Crest will finance used vehicles and private-party sales.

Crest Capital Services

Crest Capital offers equipment financing and leases up to $500,000, with terms between 24 and 74 months.

Crest Capital Rates & Fees

Crest Capital’s interest rates start at 5%. There is an administrative fee of $275 on all products.

Crest Capital Eligibility Requirements

To get funding through Bank of America, you need to meet these requirements:

Time In Business: 2 years
Business Revenue: Varies by amount borrowed
Credit Score: 650

Business Auto Loans VS Personal Auto Loans

Commercial (business) auto loans and personal (consumer) auto loans have a similar structure as far as terms and fees. However, there are a few key differences between these two loan types.

Key differences:

Business auto purchases and financing fees are tax-deductible
Business auto loans help your business build credit
Purchasing a vehicle through your company will reduce your personal liability for the vehicle but will likely have higher insurance costs
Personal (consumer) auto loan offers are based on your personal credit history; commercial vehicle financing companies also factor in your business credit score, time in business, and business revenue

Typically, an established business that requires a vehicle will benefit from financing that vehicle through a commercial vehicle loan. If you have a small, newer business but good personal credit, you may have better luck securing a consumer car loan. Just make sure you consider all of the liability, insurance, and tax implications.

Business Auto Loans VS Leases

When evaluating funding options for business vehicles, there are two major options to consider: commercial auto loans and commercial auto leases. A business owner needs to understand the differences between the two before starting the application process.

Commercial vehicle loans are used to pay for the vehicle over time (typically five years, though terms can be longer or shorter). The borrower pays a set amount each month for the entire length of the term. This payment applies to the loan’s principal amount as well as interest paid to the lender for advancing the money.

During the repayment process, the vehicle’s title will list the lender as a lienholder. That gives the lender the right to repossess the vehicle if the borrower goes into default. However, once the borrower has paid the balance in full, the lender will no longer be a lienholder. The title then goes to the borrower, giving them full ownership of the car. They can continue to use the vehicle, trade it in for another vehicle, or sell it outright.

The other type of financing is leasing. Leasing is more like a long-term rental. A lessee (in this case, the business owner) agrees to make monthly payments on the vehicle. The lease period will be for a set period, such as three years; during that time, the lessee can only drive the car for a set number of miles per year. The vehicle must be well taken care of and not damaged while in use.

At the end of the lease period, the business owner has two options: they can pay off the balance of the lease and own the vehicle, or they can return it. When business owners return leased vehicles, they have the option to enter into another lease for a newer vehicle. Through a lease, the business owner will never own the car unless the vehicle is paid for with cash at the end of the lease period.

Key differences:

Loans typically cost more money upfront and have higher monthly payments compared to a lease
Leases typically have higher insurance costs compared to a loan
Loans are more cost-effective if you want to keep the vehicle for an extended period, whereas leases are less expensive for short-term vehicle use
Loans are better for businesses that rack up a lot of mileage (leases typically restrict the number of miles driven annually)

Though a loan or a lease may work better for your business, depending on your needs, repeatedly entering into leases is ill-advised, as it will result in thousands of dollars in payments without ever actually owning the vehicle.

How To Get A Business Auto Loan

Once you find a business vehicle you want to purchase, you can start the process of obtaining a loan. To secure a business auto loan, you’ll need to gather your necessary business documentation, select a lender, and ideally do some comparison shopping before signing on the dotted line.

Gather Your Documents

While business car loan requirements vary by lender, an applicant should expect to gather similar documentation regardless of the chosen lender. Business and personal documentation are required to receive a business auto loan. Items such as business licenses and articles of incorporation will be required to prove ownership of the business. A federal Employer Identification Number will also be needed for the application. Sole proprietors without an EIN will be required to submit their Social Security numbers.

The borrower must prove they can make the monthly payments on the loan or lease by submitting documents, such as tax returns, cash flow statements, and bank statements.

Select A Lender

Once you have gathered all of your application materials, it’s time to find a reputable lender to work with and prepare your application. While it is possible to go to an auto dealership to obtain a commercial vehicle loan, this usually results in multiple inquiries on a credit report, which can lower a credit score. Instead, business owners should shop around on their own and have funding in place before making the purchase. The options on this list are all good choices, but you may wish to go through your business bank or credit union or seek out another alternative lender.

Compare Offers

Your application was accepted, and now you have a loan offer. Great! But before making your final decision, it can be helpful to seek out more than one loan offer for comparison purposes. With online lenders, in particular, it is easy to get pre-approved for multiple loans without triggering any hard credit checks (the kind that dings your credit). When comparing loan offers, you’ll want to consider things such as the down payment amount, interest rate, monthly payment, term length, and collateral.

So what’s typical? Lenders reserve their best commercial auto rates for borrowers with the strongest credit histories and proven track records of cash flow. Someone with excellent credit should be able to get an interest rate well under 5%, while a startup or bad credit business owner could see rates as high as 20%. On average, business owners should expect to put 10% of the total vehicle cost toward the down payment or as much as 15-25% down on a commercial truck. Maximum terms vary, but 60 months is a typical repayment term for most auto loans. Most small business loans also require you to sign a personal guarantee as collateral.

Business Auto Loan FAQs

Should I lease or loan my commercial vehicle?

It depends on a few factors, such as how long you want to use the vehicle, your budget, and your expected mileage. Loans make more sense for long-term vehicle use. A business auto loan usually costs more upfront than a lease and may have lower monthly payments, but the insurance costs are lower with a loan vs. a lease.

Can I get a business auto loan if I have bad credit?

Yes, from certain lenders. However, business owners with poor credit should expect to receive higher interest rates, which will increase the monthly payment amount. Higher down payments may also be required for borrowers with low credit scores.

Can I get a business auto loan without signing a personal guarantee?

Most of the time, you will have to sign a personal guarantee to get a business auto loan. In some cases, you might be able to avoid a personal guarantee if you have good credit.

Do I need to put money down to get an auto loan?

Not necessarily; some lenders may offer a “no down payment” option for the most qualified buyers. However, financing a vehicle with no down payment will result in higher monthly payments and a higher likelihood of your loan going “upside-down” (when you owe more money on the vehicle than what it’s worth).

Can a business finance a vehicle loan?

Yes, a business can finance a vehicle loan.

What paperwork do I need for a business auto loan?

The paperwork you need to submit to get a business auto loan will vary depending on the lender, but you might have to submit documents such as:

Proof of identity
Business license
Articles of incorporation
Employer Identification Number (EIN)
Tax returns
Cash flow statements
Bank statements

Should I prefer an SBA approved lender instead of other lenders for an auto loan?

SBA loans tend to have lower rates and better terms compared to other lenders. Additionally, SBA preferred lenders have more authority to make lending decisions, so the process of getting an auto loan from an SBA preferred lender might be faster than other SBA lenders.

In Summary: Best Auto Lenders For Small Businesses

BusinessLoans.com:
- Term loans, STLs, LOCs, & MCAs
- FICO: No minimum
- APR: Varies by lender
National Funding:
- Equipment financing, STLs
- FICO: 600+
- APR: 4.99%+
SmartBiz:
- SBA loans, term loans, LOCs, & ERC refunds
- FICO: 650+
- APR
Wells Fargo Equipment Financing:
- SBA loans, LOCs
- FICO: 640+
- APR: Prime + 1.75%+
Bank of America Business Loans & Lines of Credit:
- Term loans, LOCs, SBA loan, commercial lending, equipment financing
- FICO: 670+
- APR: 6.19+
Crest Capital:
- Equipment loans & leases
- FICO: 650+
- APR: 5%+

Bio
LinkedIn
Latest Posts

Chris Motola

Senior Staff Writer at Merchant Maverick

Chris has been writing about small business topics since 2003. In 2015, he joined Merchant Maverick, where he writes about business financing, payment processing, and demographic trends in entrepreneurship. Chris has been featured in Fox Business, ABC News, Yahoo Finance, GoBankingRates, Newsweek, BizJournals, and other publications. He has a Bachelor’s of Arts in English Writing Arts from SUNY Oswego, and a Masters of Science in Interactive Media from the University of Central Florida. He currently resides in the Hudson Valley region of New York.

View Chris Motola's professional experience on LinkedIn.

Latest posts by Chris Motola (see all)

The 6 Best Unsecured Lines Of Credit For 2023 - August 22, 2023
The 7 Best Commercial Construction Loans - July 10, 2023
The Best ACH Loans For Your Small Business - June 21, 2023
The 5 Best Commercial Real Estate Loans For 2023 - May 9, 2023
The 6 Best Startup Business Loans For 2023 - April 20, 2023

Show less

1. BusinessLoans.com

❮ ❯

Term loans, STLs, LOCs, & MCAs
FICO: No minimum
APR: Varies by lender

2. National Funding

❮ ❯

Equipment financing, STLs
FICO: 600+
APR: 4.99%+

3. SmartBiz

❮ ❯

SBA loans, term loans, LOCs, & ERC refunds
FICO: 650+
APR

4. Wells Fargo Equipment Financing

❮ ❯

SBA loans, LOCs
FICO: 640+
APR: Prime + 1.75%+

5. Bank of America Business Loans & Lines of Credit

❮ ❯

Term loans, LOCs, SBA loan, commercial lending, equipment financing
FICO: 670+
APR: 6.19+

6. Crest Capital

❮ ❯

Equipment loans & leases
FICO: 650+
APR: 5%+