How to Get the Best Car Loan For Your New Business
Getting a car loan for a new business
Having a car can really change things if you’re running a small business. Being able to get to places easily, or even transporting clients around, is much easier if you have your own vehicle available to use whenever you need it.
If you’re a new business, you may find it hard to get a good rate for business car loans. For any business in its initial stages, there often just isn’t the financial history to support your application.
Why is it harder to get a car loan for a new business?
In short, you are a new business and you have no previous record of your reliability or capability to pay back the money.
This makes you a higher risk borrower than you would be otherwise. Any borrower who is seen as a high risk to the lender generally finds it harder to get a loan approved.
In addition, the lender may counteract your risk level by offering you business car loans that have higher rates of interest or additional fees. If you’re unsure about whether the rates and fees are fair, you should speak to one of our experts to get advice and direction.
What can help you get approved for business car loans?
Find the right lender
This is the first step on the road to successfully getting a car loan for a new business. We have access to a range of lenders and can direct you to the ones who are right for you. You need to find a lender who has experience helping new business owners get business car loans, and who isn’t solely reliant on your financial history to approve a loan application. The right lender will carefully listen to you and find out about your personal and business background before helping in any way they can.
Show what you have
Although you may not have years of cash flow or bank statements to show to a lender, you can make the most of the documents that you do have. Often the right lender will look favourably on a good business plan with clear financial forecasts and realistic budgeting.
Organise your personal finances
In some cases, lenders may ask to see your personal finances and check your credit history. If your business is new, it may not have any credit history yet, so you are the existing representative of your business. Always make sure that your personal finances are in a good state before you apply for a car loan for a new business.
Give evidence of previous work
If you’re able to give examples of previous projects or business start-ups that you’ve worked on, these could be useful to a potential lender. Showing any sort of financial success in the past will be likely to help you get approved for business car loans.
Are there other options?
Getting a car loan for a new business is not an impossible challenge. It’s certainly something that you can do. Depending on how quickly you need to have a car, it may be possible to consider other options.
It’s always possible to use your own car or a friend or partner’s car until your business gets off the ground. Having some kind of credit history is always better than none so if you can delay your car loan application until your business has been active a bit longer, you could get better rates.
You could also consider car rental as a short-term solution. This can be more expensive than a car loan, but it will help add to your credit history so you can apply for a car loan at a later date.
Speak to the experts
If you’re running a new business, there’s going to be a lot on your mind. Speak to us to help lessen the burden, and we can help you find the right business car loans for your circumstances. We can help you save time, money, and unnecessary stress.