For many businesses, it makes a lot of sense to take out a car loan for the purposes of its day-to-day operations, or those of its employees. A business car loan is a form of commercial finance used to acquire anything from fleet cars, to employee vehicles, trucks, equipment and much more. Some of the more popular varieties of business car loans include chattel mortgages, hire purchases and novated leases. Behind all of these however, the application process is one that requires careful navigation.
What are the key requirements for a business car loan application?
As with any application for finance, a business car loan involves numerous hoops you’ll have to jump through to verify your company’s eligibility and good standing to repay a loan. Depending on the size of the business in question, there will be varying degrees of illustrative proof required. These are the most common forms of supporting documentation your financier is likely to request.
- Identification: You’ll have to provide standard identification to support your application, which may include a driver’s licence, or other form of identity proof such as birth certificate.
- Business Car Loan Application: The longer you have an established business, the easier and more likely it is your application will be approved. Therefore, having a track record as far as financial statements from previous years is vital, as is some guidance as to the future direction of the business. The financier will also want to see evidence that the car in question will be predominantly used for business purposes, that is, more than 50% of the time.
- Business Ownership: In order to be considered for a business car loan, you must be connected to the business as an owner, either in full, or part. As such, you should have company statements indicating your portion of ownership and control in the business.
- Personal Finances: It’s not uncommon to be required to personally guarantee a business car loan. A financier will want to see your personal assets, plus salary, bank statements and credit history.
- Budgeting: Like all other applications for finance, you should demonstrate a budget to prove that the company has the means to make repayments in full and on time.
- Insurance: You should have insurance secured before you apply for a business car loan, otherwise it will delay the application process.
Most importantly, make sure you’ve taken the necessary time to gather all supporting documentation before you apply for a business car loan. The last thing you want is to provide incorrect information, or omit something important, and have your application knocked back.
The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.