Worker leaning on company's truck and smiling to camera. Concept: Best auto loans for small businesses
Max Cordova
By: max
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What Is the Best Auto Loan for Small Businesses?

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Does your business use a company car? For some companies, it may be a significant purchase. Still, it can also be the only way to make deliveries, get around from one location to another and therefore increase sales.

Those are not the only benefits to having a company car, otherwise known as a commercial vehicle. A company car or truck can also provide flexibility in terms of what you’re able to do from a business perspective.

All that being said, buying a company car or truck when you’re a small business can feel somewhat overwhelming. That’s why you might consider taking out an auto loan to finance your company vehicle.

But what is the best auto loan for you? We’ll help you narrow down your options.

The Best Auto Loan for Small Businesses

To find the best auto loan that fits your company’s needs, the first place to start is by looking at different auto loans and lenders. Each lender may differ in the loan amounts they can provide, the loans’ terms and conditions, interest rates, and application requirements. One lender may not be better than the other, but one may be better for you.

Lender Camino Financial Bank of America LightStream Capital One U.S. Bank
Requirements Business must have been operating for at least 9 months and generate at least $30,000 in annual sales Social Security Number, employment and income verification,  U.S. citizenship
  • Borrowers must have good credit and enough income and assets to cover the desired auto loan
  • Borrowers must have a MasterCard or Visa credit card for verification purposes
  • Have a minimum monthly income of $1,500 or $1,800, depending on credit score
  • Have an existing Capital One account in good standing
  • Only available to purchase a 2010 model year or newer vehicle with fewer than 120,000 miles, and at available participating dealers
  • The car must be purchased from a participating dealer
  • Automatic payment from a U.S. Bank personal checking account is required
Loan Amounts $5,000-$400,000 Minimum $7,500 $5,000-$100,000 Minimum $4,000 Minimum $10,000
Interest Rates Annual: 12% – 31.25% Starting at:

  • 2.99% (for new cars)
  • 3.29% (for used cars)
  • 3.99% (to refinance cars)
Annual: 10%-43.99% 3.99% (for new cars)

4.45% (for used cars)

Starting at 4.59%
Loan Terms 18-60 months Up to 60 months 24-84 months Up to 36 months Up to 36 months
Benefits 
  • Fast funding: 2-10 days
  • Easy online application
  • Flexibility in amounts and terms
  • Check more benefits at the bottom!
You can fill out an application online and start searching for a vehicle directly through their website
  • They offer the “Rate Beat Program” in case you see a better rate elsewhere
  • Same-day funding available
  • Instant prequalification
  • You can search for the car you want directly through the Capital One website
  • You can also get financing for leasing a vehicle
  • User-friendly auto-loan calculator

Company Vehicle: Buying or Leasing?

If you are not sold on buying a company vehicle, should you lease it instead? If you lease a car, you probably won’t need a loan. But keep in mind that the leasing payments will last for as long as you use the vehicle, as opposed to loan payments, that have and specific term.

So, which option is better? Let’s discuss the pros and cons of buying vs. leasing a business vehicle.

Buying a car

Pros:

  • You are the owner of the vehicle, not the dealership. Buying a company car or truck means that it becomes an asset for you. You can also decide what to do with it when you’re finished making your payments. You can keep the vehicle, or you can sell it.
  • There are tax advantages to buying and owning your car. You can make deductions based on factors like loan interest and repairs.
  • When purchasing, you’ll likely be able to choose from a far bigger selection than you would if leasing from a dealership.
  • You can do what you want to customize the vehicle without needing to worry about getting charged penalties. For instance, you can put your company logo on the car or truck, or paint it in your company’s brand color.
  • Once you are done with your car payments, you can get a cheaper insurance plan for your company vehicle.

Cons:

  • Usually, your monthly payments are higher than they would be with a lease.
  • If you have the money and decide to pay the full asking price in cash, this can reduce your Budget considerably. It will refrain you from making other investments that could benefit your small business.
  • You’ll have to pay for maintenance and repair costs, which generally, the dealership would take on if you leased.
  • Vehicles depreciate, which means you may not be able to sell it for much when you no longer need it.

Leasing a car

Pros:

  • Usually, you don’t have to put much money down (if any at all), and monthly payments are lower than when buying. That will depend on the type of vehicle you lease, of course.
  • You can easily upgrade to another car when your lease is up.
  • You don’t have to take care of serious repairs.

Cons:

  • In most cases, you will need a high credit score or a stable income to be able to lease a vehicle. That is not always ideal for an entrepreneur.
  • You may be restricted to certain mileage limits, which can be difficult if you are using the car for work purposes.
  • The inventory may be limited, and you might find it hard to find a car that fits your needs.
  • You cannot use a leased car as additional collateral for another loan because it does not belong to you. But, when leasing, the car IS the collateral for the dealership and, therefore, it can be taken away if you don’t make your payments as agreed.
  • Your insurance will be more expensive than if you own the vehicle.

Buying a Business Vehicle? Camino Financial Can Help! 

If you want to have the flexibility and benefits that come with owning a commercial vehicle, then buying is your best option.

Unlike a lease, the difficult part of buying a vehicle is paying upfront the whole price. Otherwise, you may have high monthly payments and interest rates to pay your dealership. To avoid this, consider taking out a business loan from Camino Financial. Our business loans are flexible, meaning that is absolutely possible to use them to pay for your commercial vehicle, and our process is fast and easy.

We live up to our motto: No Business Left Behind. That means our business loan specialists will do their best to match you with the financing solution that fits your goals and needs.

We’ll make sure you receive the funds you need as soon as possible and with the best terms and conditions available. Don’t miss out on a special offer or sale from your dealership just because you don’t have the cash you need in hand! If you’re approved for one of our business loans, the funds can be in your bank account in just 2 days.

There are additional benefits of taking out one of our loans: you can rest assured that we will never use your vehicle as collateral. You don’t need a minimum credit score or even a credit history at all to be approved for one of our business loans. You don’t need an SSN either: we accept applicants with only an ITIN.

And after only 9 months of timely payments, you can upgrade to a second loan with lower interest rates and better terms. On the other hand, if you decide to pay off your loan before the term ends, you won’t be charged with a prepayment penalty. To sum up, you have flexibility, and you are in control of your loan.

We invite you to learn more about how our business loans work.

Once you realize we are the best option to finance your company vehicle, get a quote for your business loan, and see instantly if you pre-qualify!

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