So you are planning to buy a new commercial vehicle for your business. Congratulations! It’s a great time for you and your business. There might be certain questions in your mind that you would like to have answered. For example, “Am I eligible for commercial vehicle loan? Which bank or finance company offers best interest rates”? There are certain eligibility criteria that are standard in all finance companies and you should be aware of them.
The most important thing that each and every finance institution will consider is the age of your business. Generally, most of them require you a minimum of 2 years and not a shady operation. Also, they want to make sure that you are in it for the “long haul”! To confirm that you have been in business for at least 2 years, a finance company may ask you to provide your Schedule C’s, your Business License or your Company’s Certificate of Incorporation. There are many financial institutions that offer loans to start up micro, small and medium business, however, they are likely to charge higher interest rates as you would need more capital upfront.
Another eligibility criterion for getting a commercial vehicle loan is a good credit score. A good score denotes the monetary balance of your company and gives finance companies a good cause to lend you. Similar to any other lender, your finance company needs to make certain that you have a good pay history on your previous debts before it decides to offer you a loan to purchase a commercial vehicle. A good rule of thumb is to keep your credit score around 700 or better. No doubt, there are many financial institutions that offer CV loans on lower credit scores, but you will end up paying more interest for the loan.
Last, but not the least eligibility criteria for a commercial vehicle loan – You must have a bank account in your business or company name. It is necessary for the verification of the monthly cash flow generated by your business. Nonetheless, all financial institutions use it as the main factor to determine your eligibility for the CV loan.
If you meet all the above mentioned requirements, you can feel confident about your eligibility for a commercial vehicle loan. So, begin your quest for a best finance company. For quick processing of your loan application, keep all documents ready when you apply.