The time may come when you need a new car or you need to repair your existing car. Sometimes, this need may emerge at a time when your business doesn’t have surplus funds. To help you with the application process we have listed some of the documents you need to apply for a commercial car loan;
Personal information documents
Your lender may need to assess your personal information to determine whether or not you qualify for a business car loan. Some of the essential personal information lenders look at includes tax returns, personal debts and income. Tax returns help lenders determine your ability to pay off your debt; hence they will use that to assess your application. Your lenders may request you to supply them with information regarding your personal tax returns for the previous two or three years. Lenders may also want to look at your income in relation to your personal debts.
In most cases, lenders will need you to produce a variety of business documents including cash flow statements, tax returns, business plan and recent bank statements. Typically, lenders need proof that you are capable of repaying your loan comfortably without any financial difficulty. Undoubtedly, lenders will require prospective borrowers to have a positive cash flow to offer them car finance. Cash flow can serve as an effective financial indicator. A positive cash flow would certainly mean that you are in a position to clear your debt. Nonetheless, the priority of business documents required by lenders may vary from one lender to another.
If you are purchasing a new vehicle, the lender will need a copy of your title or the purchase agreement to serve as collateral. Since cars usually depreciate in value, lenders tend to enforce age limits on the financed vehicles. Usually, they will only finance cars that are below seven years old. You will be required to provide your vehicle’s Identification Number to enable your lender to research more about the car intended to be financed.
Proof of ownership documents
For you to secure any business car finance from lenders, you will have to prove your business ownership. Lenders need to ascertain that indeed you own the business. Hence, you must supply your lender with legal business documents that prove business ownership. If you own part of a business, your lender may need you to produce documentation demonstrating that you have at least 20% of the ownership stake. In some instances, you may have to produce a business licence, limited liability company documents or a partnership agreement.
To get a commercial car loan contact Hubbe today!