Overview of commercial vehicle loans

Commercial vehicle loans are loans used to finance automobiles for companies. The reasons for seeking out and acquiring a commercial vehicle loan vary and may include 1) cash flow requirements 2) operational need 3) optimization of asset value etc. Commercial vehicle loans can be obtained from financial institutions specializing in corporate financing and loans as well as several other sources.

Other means of financing commercial vehicle loans include business to business loan(s), consumer loan(s), and government loan(s). If a company has decided to choose the loan option to finance a commercial vehicle, then other options such as capitalization, retained earnings, redirection of assets etc. are not used for that particular vehicle. Some examples of vehicles for which a commercial vehicle loan include the following:

• Construction vehicle(s)

• Delivery automobile

• Outcall service logistics

• Staff transportation

• Disabled persons relocation

• Other service related cars, trucks etc.

Types of commercial vehicle loans

Size and type of commercial vehicle loans can vary dependant on the company's needs. Smaller businesses may only need a small vehicle for service call transportation or staff relocation. Medium and larger businesses may require a whole fleet of vehicles or more expensive heavy-duty vehicles depending on the nature of the business. 

For example, landscaping companies may require trucks to pull trailers and health care providers may obtain commercial vehicle loans for ambulances. The following illustrates the types of loans that may be applied for and/or acquired by a company to finance a commercial vehicle.

• Private loans

• Bank loans: Bank loans

• Municipal, State or Federal loans

• Asset backed loans:

• Business to business loans:

• Public loans

Applying for a commercial vehicle loan

To apply for a commercial vehicle loan gather company financial statements, loan application documents and operational purpose statement(s) for the loan. It is likely lenders will require some kind of documentation to verify capacity to pay back the loan. 

It the loan is privately financed, such documentation is not necessarily required, however knowledge and familiarity with the lender in addition to a contract may be asked for. A checklist of items that may be required is listed below. Sometimes an in person interview will be required to obtain a commercial vehicle loan. In such cases being well prepared and organized can assist in supporting the commercial vehicle loan application's chance of being approved.

• Loan application

• Company financial statements

• License and insurance documents

• Titles, deeds and account(s) information 

• Company registration and/or good standing forms

• Market analysis or vehicle feasibility forecast

Ways to find a good deal on a commercial vehicle loan

As with all for profit business endeavors, keeping costs down and profit up is an ongoing concern. For this reason finding a good deal on commercial vehicle loans is often a priority for businesses seeking such loans. To find the best, or good deals on commercial vehicle loans whether they are new or used cars, consider applying business principles that encompass more than just interest rates on the loan. Moreover, although interest rates are important, there are also other important factors to consider such as those mentioned hereafter. Optimizing loans by considering the implications on business operations, profitability, financial statements, taxes, and asset value are all important to the business with efficiency and effectiveness in mind.

• Interest rates

• Compounding periods

• Loan terms

• Affect of loan on company financials

• Benefit of loan in comparison to cost

• Asset purchase(s) with the loan

Summary

Commercial vehicle loans are used to pay for company assets used for specific functions relating to the use of the vehicle. A wide range of businesses make use of vehicles in their business operations. Since some vehicles can require a sizable use of liquid assets, in some cases, it may be advantageous or necessary to obtain a commercial vehicle loan. 

A multitude of commercial vehicle loan options exist for companies including those mentioned in this article. When obtaining a commercial vehicle loan it can be wise to consider the loan in terms of a latitudinal affect on the company rather than just financial. This means multiple considerations that can influence the businesses profitability and efficiency may be considered when seeking out financing.