The Complete Guide to Business Auto Loans

Let's Get Started

Business Auto Loans: The Ultimate Guide

    What Is a Business Auto Loan?

    A business auto loan, sometimes called a commercial auto loan, is a specific form of equipment financing that allows you to access low-cost capital to purchase cars or trucks—which then function as collateral for the loan itself. This self-collateralizing setup makes it much easier to find a business auto loan without personal guarantee requirements.

    Overall, business auto loans are very similar to consumer auto loans—and although the rates and terms will vary based on the individual lender, these business loans are generally very affordable and accessible for businesses of all shapes and sizes.

    Is business auto loan financing right for you?

    We’re here to help you find out. In this guide, we’ll break down everything you need to know about business auto loans, starting with the top commercial auto lenders.

    Apply for an SBA Paycheck Protection Loan

    The Top 6 Business Auto Loan Options

    If you’re thinking that a business auto loan might be a suitable financing solution, you’ll want to compare the best lenders to find the one that meets your unique needs.

    Although there are a variety of lenders out there that can offer this form of equipment financing, you might start your search with these top six options, summarized in the chart below:

    Lender Eligibility Criteria Rates and Terms Best for:
    600 credit score; one year in business; $100,000 annual revenue
    Starting at 7%; Two to six years
    Highly qualified borrowers; ideal rates and terms
    “Decent” credit score; one year in business; $100,000 annual revenue
    Starting at around 10%; up to five years
    Faster funding than a bank
    620 credit score; $120,000 annual revenue
    Starting at 6%; up to seven years
    Auto loans for startups
    650 credit score; two years in business
    Starting at 5%; two to seven years
    Low interest rates from online lender; highly qualified borrowers, larger loan amounts
    620 credit score; two years in business
    Starting at 4.99%; up to five years
    Mix of funding speed and affordability
    620 credit score
    Starting at 5.49%; six months to six years
    Fast funding and affordable rates from online lender; newer businesses

    Let’s take a look at these options in more detail.

    1. Wells Fargo

    If you’re looking for the most affordable business auto loan, you’ll always want to start with a bank, like Wells Fargo.

    Although you might be able to find a Bank of America or Capital One business auto loan, the Wells Fargo equipment financing program is one of the best out there—offering options for trucks, semi-trailers, specialty vehicles, buses and motorcoaches, and more.

    Overall, the rates and terms for a Wells Fargo business auto loan will vary based on the specific program and your business’s qualifications, however, you’ll generally find that they can offer:

    • Up to 100% vehicle financing to purchase new or used equipment or upgrade existing equipment
    • Loan amounts of up to $100,000
    • Terms of two to six years
    • Interest rates starting at 7%

    This being said, of all the business auto loan options on our list, Wells Fargo will likely be one of the most affordable, but also one of the hardest to qualify for and slowest to fund. In general, this bank-based business loan will require at least one year in business, a minimum credit score of 600, and at least $100,000 in annual revenue.

    2. Balboa Capital

    Next, if you need business auto loan financing faster than what a bank like Wells Fargo can offer, you might consider Balboa Capital as one of your best options.

    Balboa Capital offers business auto loans ranging from $3,000 to $250,000 with terms as long as five years. Within their equipment financing program, you can use this loan to purchase new or used vehicles, as well as other types of equipment.

    Although Balboa doesn’t specify their rates online, you’ll likely find that they start around 9% to 10% and vary based on your qualifications. Plus, as an alternative lender, Balboa offers a quick and easy online-based application process with same-day funding up to $250,000.

    This being said, in general, to qualify for a business auto loan from Balboa, you’ll need to have at least one year in business, a minimum of $100,000 in annual revenue, and a “decent” FICO credit score.

    Therefore, even though Balboa might charge slightly higher interest rates than a bank, you’ll find that they offer higher loan amounts, a streamlined application process, and more lenient requirements.

    3. Currency Finance

    Similar to Balboa, if you’re looking for a larger business auto loan with a faster time to funding, you might consider Currency Finance as a top option.

    Currency provides business auto loans ranging in size from $5,000 up to $500,000. Interest rates on Currency Finance auto loans start as low as 6% with terms up to seven years.

    Additionally, although Currency’s larger loan amounts can be a draw, they excel at financing smaller loans—offering a simple and fast application process for loans under $150,000 and funding in as little as 24 hours. To this point, even though larger business auto loans will require greater documentation and be slower to fund, you’ll still find that Currency’s process will be easier and faster than working with a bank.

    This being said, like other online lenders, Currency also offers fairly flexible requirements, especially for startup funding. To qualify for a business auto loan from Currency, you’ll need a minimum credit score of 620 and at least $120,000 in annual revenue—Currency does not, however, have a time in business requirement.

    4. Crest Capital

    Next on our list of the top business auto loan providers is Crest Capital. This lender has one of the best reputations in the industry and offers commercial auto loans ranging from $5,000 to $1 million.

    Crest Capital auto financing is available in terms ranging from two to seven years, with interest rates as low as 5%.

    Additionally, Crest offers both vehicle financing and vehicle leases, with a number of loan structures within both of these options. It’s worth noting, however, that although Crest offers the full range of vehicle financing solutions, they do not finance passenger vehicles or trucks for owner-operators.

    Moreover, if you’re looking for a business auto loan of $250,000 or less, you’ll be able to use Crest’s streamlined online application. For larger loans, though, you’ll need to submit a paper application. All in all, Crest will be able to fund you faster than a bank, but might not be quite as fast as Currency or Balboa.

    Finally, it’s also important to mention that for an alternative lender, Crest has pretty high business loan requirements. You’ll need a credit score of at least 650 and at least two years in business to qualify.

    5. Funding Circle

    Although Funding Circle isn’t exclusively a vehicle or equipment lender, they offer a mix of speed and affordability that’s ideal for a variety of businesses.

    With Funding Circle, you can receive term loans ranging in amount from $25,000 and $500,000 with repayment terms up to five years and interest rates starting at 4.99%.

    Funding Circle’s online application is quick and easy—with most businesses receiving their funds within five days. Additionally, Funding Circle offers fixed monthly payments, no prepayment penalty, and funds can be used for virtually any commercial auto-purchase or renovation you’re looking to make.

    This being said, to qualify for a business auto loan from Funding Circle, you’ll need a minimum credit score of 620 and at least two years of business history. Plus, unlike some other lenders, Funding Circle does not have a minimum annual revenue requirement.

    6. CIT

    Finally, last on our list of the best business auto loan options is CIT, formerly Direct Capital.

    CIT is another online lender that offers a host of financing options, including vehicle and equipment financing. If you work with CIT, you can qualify for a business auto loan of up to $500,000 on repayment terms ranging from six months to six years.

    Overall, CIT offers both loan and leasing options, with flexible term lengths and repayment options to meet your business’s needs. In addition, interest rates start as low as 5.49% and these loans can fund as fast as one day.

    Moreover, CIT has some of the most flexible requirements of any of the lenders we’ve reviewed—they only have a minimum credit score requirement of 620. In this way, CIT is a great option for startups and newer businesses.

    See Your Auto Loan Options

    Business Auto Loan Details

    So, now that you have an idea of the best small business lenders offering loans for commercial vehicles, let’s break down some of the fundamentals to better understand how this form of financing works.

    Once again, as we saw above, many of these details will vary from lender to lender, but generally, here’s what you can expect when looking for a business auto loan.

    Business Auto Loan Rates

    As with most forms of equipment financing, business auto loans will give you access to some of the most affordable interest rates out there, because the vehicle itself will act as collateral for the funding.

    On the whole, business auto loan interest rates can fall as low 3.89% if you’re accessing funding through a bank—whether Capital One, Bank of America, or, like we discussed, Wells Fargo.

    With alternative lenders, on the other hand, you’ll usually see interest rates start a little higher, around 8%, due to the speed and more lenient requirements associated with these lenders.

    Of course, it’s important to remember that business loan interest rates can range, and these are just starting rates. Generally, the better qualifications you have, the lower interest rates you can receive—so you’ll want to keep this in mind when applying for a business auto loan.

    Business Auto Loan Amounts

    The amount you can receive for a business auto loan can range from as low as $5,000 to as high as $2 million, or more.

    Additionally, most lenders will be able to offer up to 100% of the value of the vehicle you plan on purchasing with the proceeds. As we saw above, most commercial auto loan lenders will put a dollar amount cap on their loans, but this will fluctuate based on which lender you choose to work with.

    Business Auto Loan Repayment Terms and Structure

    Overall, most business auto loan financing will be structured similar to any business term loan, with repayments made on a monthly basis. This being said, however, you may see some variation, like balloon-payment loans, so you’ll want to understand exactly how any loan works before agreeing to work with the lender offering it.

    Additionally, due to the higher loan amounts associated with this type of financing, you’ll find that terms are on the longer side—ranging anywhere from one to seven years.

    Business Auto Loan Requirements

    Finally, because business auto loans are a form of secured, asset-based financing, they’ll have more manageable requirements than their unsecured alternatives.

    Generally, you’ll be able to qualify for a business auto loan if you have a credit score of 600+, at least one year in business, and at least $100,000 in annual revenue. These requirements, however, will vary based on the lender.

    To this point, as we discussed above, banks will typically have the strictest requirements, whereas alternative lenders will be more lenient.

    Moreover, because the automobile itself will be securing the loan you take on, finding a business auto loan with no personal guarantee requirement will be much easier than it would be with other types of loans.

    Most lenders ask for a personal guarantee in place of collateral, so many business auto loan lenders won’t necessarily require that you provide a personal guarantee to secure your debt.

    Business Auto Loans vs. Business Auto Leasing

    As we saw with some of our top lenders, many times you have the option of choosing between a business auto loan vs. a business auto lease.

    Although both will have their respective merits, it’s important to note that with a lease, you won’t ever own the car or truck.

    As a result, you won’t be able to consider any vehicle you lease an asset when calculating your business’s worth. Meanwhile, a business auto loan will allow you to own your car or truck, while also paying down the cost gradually.

    However, at the end of the lease, you do have the option to pay off the balance and own the vehicle or enter into a lease for another vehicle. This might make more sense if you can’t qualify for a business auto loan, or if you don’t want to be stuck with equipment that will soon be outdated.

    When to Get a Business Auto Loan

    If you want to keep the vehicle for an extended period of time, a business auto loan is a good option.

    With an auto loan, you can rack up the mileage, and don’t have to worry as much about wear and tear on the car.

    Additionally, business auto loans are usually cheaper than leases in the long run.

    When to Get a Business Auto Lease

    On the other hand, an auto lease is a good option if you want to upgrade every few years to a newer model, or if you don’t plan on racking up a large number of miles.

    However, leases are usually more expensive than loans, especially since you’ll have to pay more if you want to buy the vehicle when the lease expires.

    Pros and Cons of Business Auto Loans

    Having taken a look at your top options for auto loan lenders, let’s now consider the most notable features of this type of business financing.

    By reviewing these pros and cons, you should have a better sense of whether a commercial auto loan is right for your business.

    Apply for an SBA Paycheck Protection Loan


    First, we’ll start with the positive and focus on the biggest advantages of taking on an auto loan to grow your small business.

    Lengthy Repayment Terms

    With a business auto loan, you’ll be able to qualify for longer repayment terms in comparison to other types of loans.

    Overall, because of the inherent collateral present in a business auto loan, this form of funding is less risky for lenders, so they’re willing to give you more time to pay down your debt gradually.

    Longer repayment terms mean that your monthly scheduled payments will be less condensed and, as a result, much easier to afford.

    Lower Interest Rates

    For similar reasons, small business auto loans will come with lower interest rates than you’ll find with other commercial loans.

    The automobile or automobiles that secure these loans make it more likely for the lender to recoup the value of your debt, even if you default on your loan.

    As a result of this mitigated risk, lenders are willing to charge you less interest than they would for unsecured business loans.

    Built-in Collateral

    The final, most notable advantage to business auto loan financing is evident from our first two points—these loans have longer repayment terms and lower interest rates due to their self-secured nature.

    Business auto loans have collateral built into their model, so you or your business won’t have to provide outside collateral to access better rates. Plus, as we discussed earlier, lenders are often willing to waive their personal guarantee requirement for this type of loan as well.


    For all of their advantages, business auto loans can come with a few notable downsides. You’ll want to keep the following drawbacks in mind before you move forward with this type of financing.

    Potentially Obsolete Vehicles

    Because small business auto loan providers typically base their repayment terms on the projected life of an automobile, you might end up with a piece of obsolete or outdated machinery once you’re done paying down the loan.

    Lenders aim to make sure that you’ve paid off your debt to them while the automobile in question retains any worth. Therefore, if you’re worried about ending up stuck with outdated equipment, you might consider equipment leasing as an alternative.

    Can Still Be Hard to Qualify

    Additionally, even though business auto loans will be slightly easier to qualify for because their self-secured nature mitigates some of the risks for the lender, they can still be tough to qualify for.

    Most lenders will require at least a year of business history to be eligible to fund with them. Plus, you’ll often need solid personal credit to be eligible to access a business auto loan.

    Therefore, if you’re running a new business, you’re working with average personal credit, or both, then business auto loans might not be an option for your business.

    The Bottom Line

    At the end of the day, if you’re interested in seeking capital for purchasing an automobile—a car, truck, bus, or RV—for your business, then it’s definitely worth considering a business auto loan.

    As we’ve discussed, these loans often don’t require additional collateral and can offer long terms and affordable interest rates.

    On the other hand, however, if you think the vehicle might be out-of-date before your repayment period is over, you might look into leasing as an alternative to this form of financing.

    Frequently Asked Questions

    Meredith Wood
    Founding Editor and VP at Fundera at Fundera

    Meredith Wood

    Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera. 

    Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.

    Read Full Author Bio