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If your company relies on one or more vehicles, a business auto loan can be an affordable way to buy a car, van or truck — or refinance one you already own to save money.
Business and commercial auto loans come with built-in collateral: the vehicle itself. That means they may cost less or be easier to qualify for than other loans, and depending on the lender, you may not have to provide a personal guarantee to secure the debt.
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Bank of America Business Advantage Auto Loan
Best for: Business owners who want time to shop around for a vehicle.
Bank of America offers business auto loans at amounts starting at $10,000 and annual percentage rates (APRs) as low as 7.09%. Loan repayment periods range from 48 to 72 months, and the funds can be used to purchase or refinance cars, vans and light trucks.
Wells Fargo Commercial Vehicle Financing
Best for: Large commercial and specialty vehicles, and seasonal businesses.
Wells Fargo offers commercial vehicle financing, refinancing and leasing for many different types of large commercial-use vehicles. Its truck financing, for example, is for new or used Class 6-8 trucks, which are generally medium-sized trucks to heavy-duty trucks that require commercial driver’s licenses. It offers lines of credit and term loans of 12 to 84 months. The bank also leases new and used semi-trailers from its own inventory.
PNC Small Business Vehicle Finance Loan
Best for: Business-use passenger vehicle.
PNC offers line of credit financing for new and used passenger vehicles from $10,000 to $250,000, with loan terms up to 72 months at fixed interest rates. In some cases, you may be able to finance the entire amount of the vehicle purchase price.
Truist Small Business Auto and Commercial Vehicle Loans
Best for: Longer loan repayment periods
Truist Bank offers small-business loans up to $250,000 to purchase or refinance vehicles such as cars, vans, SUVs and light trucks with terms up to 75 months. It also offers commercial vehicle and equipment loans up to $250,000 but with repayment periods of up to 84 months.
A longer loan term will generally offer a lower monthly payment for your business than a shorter term. This can be helpful for small businesses operating on a tight budget. However, longer loan terms typically have higher interest rates than those with shorter terms.
Ally Bank Business Auto Loan
Best for: Flexible auto leases and no personal guarantees.
If you can qualify, Ally offers options to buy or lease the vehicle in the name of your business which could help you keep the debt off your personal credit report and protect you from liability related to the use of the vehicle.
Navy Federal Business Vehicle Loans
Best for: Best for veteran business owners
Although it is a credit union and not a bank, Navy Federal Credit Union (NFCU) is another type of traditional lender to consider for vehicle loans. NFCU offers business and commercial vehicle loans to its business members. Business vehicle loans can be used to purchase or refinance cars, light-duty trucks and SUVs. Commercial vehicle loans, on the other hand, are used only for purchases (no refinances) of commercial, heavy-duty or specialty trucks and vans, and semi-tractor trailers.
While NFCU is not transparent about its requirements for business vehicles loans, its commercial vehicle loans start at $40,000, require borrowers to be NFCU business members for at least one year and require at least a year in business.
Best for: Startups or borrowers with bad credit.
National Funding is an alternative lender with commercial vehicle financing and leasing of up to $150,000. Commercial financing and leasing options are offered for commercial cars, vans, trucks and taxis. Its eligibility criteria are less strict than some other business auto loan providers, allowing more business owners to potentially qualify.
Best for: Same-day funding for commercial trucks.
Balboa Capital is an alternative lender that specializes in equipment financing. It offers financing of up to $500,000 for commercial trucks, semi-trucks, dump trucks, vans, flatbed trailers and other vehicles.
Best for: Hard-to-finance trucks or specialty vehicles.
Crest Capital is an alternative lender that offers business auto loans from $5,000 to $500,000. Crest Capital can be a good choice if the vehicle you want to buy or lease won’t qualify for traditional funding. Only fixed-rate loans are offered with no requirement to requalify annually.
Crest Capital doesn’t have vehicle mileage or age restrictions and will finance vehicles sold by private parties. It considers most new and used work-specific trucks, vans or specialty vehicles, including ambulances, hearses, fire trucks, cranes, boom trucks, concrete mixers, water trucks and other specific-use trucks. Crest Capital does exclude vehicles used as taxis services and transportation company tractor trailers.
Crest will also finance corporate cars and SUVs in the business’s name, but you must have at least five years in operation, at least a 700 credit score and own a home to qualify.
Business auto loans are similar to personal auto loans: You get money to buy a vehicle and repay that amount plus interest over a set term. But there are some notable differences:
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The vehicle is for business purposes. Small-business owners’ personal and professional lives often blur, but business auto loans are meant for vehicles used by your company. When you apply, the lender will likely ask how you’ll use the vehicle and you may need to provide documentation like a business plan or company financial statements.
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The vehicle can be in your business’s name. For qualified borrowers, some lenders will let you put a business auto loan in your company’s name only. This can protect your personal credit or assets should your business be unable to repay the debt. In other instances, you’ll need to provide a personal guarantee for the loan as collateral.
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Potential tax deductions are available. If you buy or lease a business vehicle, you can deduct its ownership and operation costs. Owners can also deduct a car’s depreciation. There are multiple ways to do this; using the standard mileage rate, actual expenses or possibly Section 179 of the tax code could allow the entire deduction all at once, though that amount varies based on factors such as vehicle type and when it was placed in service.
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Find the right vehicle. This means not only the type of vehicle that fits your business’s needs, but also one a lender will approve. For example, if you want to finance a used car, many lenders will have specific mileage limits and won’t approve a vehicle that’s more than five years old due to the depreciation.
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Compare offers. If your company has a relationship with a financial institution, it can make sense to see if it offers business auto loans. But as with other types of business loans, you may pay less by shopping around. Look at a lender’s APR and details like how much you can finance. If it’s less than 100% of the vehicle’s total cost — don’t forget expenses like taxes and registration — you’ll need more cash on hand.
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Apply with a lender. Lenders will have different application procedures. The process may be time-consuming and require paperwork like a business license, business tax ID and information about all the business’s owners. If you’re in a rush, alternative lenders may offer a more streamlined application process, but also more expensive loans.
Lenders may offer both business auto leases and loans. Consider a loan if you want to own the vehicle outright in the long run. However, a business auto lease may make sense if:
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You need to free up cash flow. If you’re worried about fitting a car’s costs into your operating budget, auto lease payments are often lower than loan payments. You may also be able to spread the sales tax over the repayment term, depending on where you live. But you could pay more in insurance, and overall, for a lease.
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You don’t want to be stuck with a car. If having the latest car model is important to your business, a lease gives you the opportunity to switch to a new car at the end of your term You also have options to get out of a car lease — like swapping it for a new one — if the vehicle doesn’t end up fitting your company’s needs.
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You know how you’ll use the car. Your lease agreement will dictate what you can do with the vehicle, both in terms of how many miles you can drive and whether you do simple modifications, like wrap the outside. If you plan to substantially upfit the car, or run it into the ground, buying may be the better option.
In addition to a business auto lease, other alternatives to business auto loans include:
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Consumer auto loan. If you can’t qualify for a business auto loan or your vehicle will be driven more for personal use, consider a consumer auto loan. This won’t come with benefits like building business credit, but personal auto loans are widely available, even if you have bad credit.
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Personal business loan. You can typically use the proceeds from a personal business loan on whatever your company needs — including vehicles. But these loans will likely be more expensive than any other business auto loan option, making them a last resort for financing a vehicle purchase.
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