What Documents Do You Need As a Business Owner to Get a Car Loan?

What Documents Do You Need As a Business Owner to Get a Car Loan?
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You'll probably find that buying a car for your business is less of a hassle than buying a vehicle through a retail dealership for your personal use. You want to purchase the car through the commercial division of a local dealership and ensure that the loan comes from a lender for business loans. A vehicle purchase can help build your business credit rating, which may be beneficial in the future.

Obtaining Commercial Credit

To put a vehicle in the name of your business, your business structure must be something other than sole proprietor, such as a C or S corporation or a limited liability company: LLC. However, even with a corporation or LLC, you still must personally guarantee a car loan. If you have co-owners, the lender may require the co-owners to also sign on the dotted line as guarantors in order to approve your financing.

Loan Approval Process

To get vehicle financing for a business owned vehicle the dealer -- or an outside lender, if you choose to go that way -- you must provide information about both your business finances and your personal finances. For a small business without established credit, loan approval for a commercial vehicle purchase will be primarily based on your credit rating. However, the lender will also want to see that you have a viable and profitable business. You may be asked for some company financials as part of the loan application process.

Required Documents

When you get ready to complete the paperwork for your business-owned car, you need to have a corporate/LLC resolution that authorizes the business to purchase the vehicle. The commercial vehicle salesman can provide a sample corporate resolution to use as a model. The resolution states that the LLC members or corporate board of directors of your company voted on and approved the vehicle purchase. You also need proof of insurance that the business has an auto insurance policy.

Commercial Financing Considerations

If you have good personal credit, buying a car in your business name should go smoothly. Going with a lender for commercial vehicles will build a credit history for your business, reducing the need for personal guarantees in the future. If you want to buy a more specialized commercial vehicle, such as a dump truck or tow truck, the lender will be more interested in how you plan to use the vehicle to generate more revenue for your business.