Business Financing: Tips on Gathering the Paperwork to Purchase a Commercial Vehicle

There are many types of businesses that rely on vehicles as an integral part of their operation. Whether you are a self-employed owner working on your own or need a fleet of wheels to serve your customers, you need to make the right financing decisions.

Here is a look at what documentation you will need as part of the application process to buy a commercial vehicle for your business. The first step is to work out if your status qualifies for a business loan and how ownership details make a difference, plus what paperwork you will need to get ready beforehand.

Do it properly

The first thing to say is that you should find that buying a vehicle for a business like should normally prove more straightforward than acquiring it for your own personal use.

You need to get some guidance from your accountant on the tax advantages and method of purchase best suited to your business status, as it can make a difference if you are a sole proprietor or a corporation.

It is always worth considering a vehicle purchase through your company as it can help boost your business credit rating, which could prove useful when you want to borrow again in the future.

Getting commercial credit

You will probably find that to obtain what is classed as commercial credit and to put the vehicle in the name of your business; your setup will have to have some other form of legal structure other than a sole proprietor.

Even if you run the business as a corporation or LLC, it is often the case that you will still be asked to provide some personal guarantees against the possibility of a default.

Confirmation of ownership

The normal starting point when getting all the documentation together for the finance company is to provide evidence of your ownership stake in the business.

If you are a corporation, you will be required to supply the lender with the articles of incorporation, and if you are applying for the loan, they will normally want you to own at least 20% of the company.

Personal and business approval

If you are applying for a loan in your own or business name, you would expect the lender to carry out some checks to confirm your credit rating and supply certain information about your finances.

To get vehicle finance for a business-owned vehicle, you will often be asked to provide details about both your personal and business finances, especially when you are being asked to act as a guarantor for the business.

You can expect the loan approval to hinge on your personal credit rating if you run a small business without any established credit history. However, they will also want to see that your business is viable and profitable like real money casinos sites.

Get your documents together.

It makes sense to gather all the documents you need together before approaching a loan to save time and be ready when the lender asks you.

A lender might want to see your last few years of tax returns and ask for details of any existing loans that you have, so personal and business bank statements might also be requested.

Getting finance for a business vehicle should be straightforward, provided you prepare and check your status suitability for this type of loan before making the application.

Taylor Bryant runs his own business, which has a fleet of company vehicles. He shares his knowledge of company vehicles in his articles, hoping his information will be useful to an online audience.

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