In the realm of business vehicle financing, it's vital to recognize that it isn't exclusive to large corporations. Small businesses, consultants, and sales professionals frequently require financial support for their work vehicles, be they personal cars or compact delivery vans. Business auto financing offers distinct advantages compared to conventional consumer auto loans, notably reducing personal liability and enhancing tax benefits.

Before you dive into comparing financing options, it's crucial to understand the factors that can sway your finance rate.

New or Used
Are you planning to purchase a brand-new commercial vehicle, or are you considering a used one? The choice between buying or leasing can also influence your financing terms. Keep in mind that the benefits of each option may differ, so it's worth exploring both.

Mileage Matters
If you're eyeing a used vehicle, take note of its mileage. The number of miles on the odometer can have a significant impact on your financing terms.

Age of the Vehicle
Depending on the make and model, some financial institutions may have restrictions on commercial auto loans for vehicles that are five years or older. This is an important consideration, as it could affect both your interest rate and the duration of your loan.

Taking these factors into account will empower you to make a well-informed choice regarding your commercial vehicle financing, tailored to meet your unique needs.

Not every dealership can handle commercial loans because business vehicles tend to depreciate rapidly, making them risky investments. Specifically, commercial vehicles can lose roughly 20% of their value within the first year of ownership.

Opting to purchase instead of lease can provide you with long-term benefits, including the potential for depreciation to be tax-deductible during tax season. Moreover, the ongoing global shortage of both new and used vehicles could potentially increase the value of your used business vehicle in the future.

Once you've decided on the type of vehicle you desire, feel free to reach out to Business Services team. Our experts are prepared to discuss rates and terms with you to help secure the most favorable deal in today's market.

Securing financing for a business vehicle is a more complex process compared to a personal auto loan. Ensure you have these documents ready when reaching out to your lender:

• Business licenses
• Driver’s license
• Partnership agreements
• Profit-loss statements
• LLC documents
• Federal employer identification number (EIN)
• Tax returns
• Bank statements
• Cash flow statements

If any of the necessary documents are missing, please contact our Business Solutions team to connect with your designated officer.

Low-rate auto loans are subject to a credit evaluation, with lenders having the ability to turn down financing applicants. Credit Unions are known for their ability to offer lending options to individuals and businesses with suboptimal credit, and First Commonwealth is no exception.

As a business owner, you'll likely need to personally guarantee your vehicle loan. It's crucial to understand the distinction between a co-borrower and a guarantor.

Co-borrower
If you're a co-borrower, the loan will typically appear on your personal credit report, affecting your personal credit profile, including your debt-to-income ratio and other factors when you seek personal credit.

Guarantor
As a guarantor, you're essentially promising that if your business doesn't repay the loan, you'll ensure it gets paid. This represents a contingent liability on your part but doesn't impact your personal credit report.

Preapproval
You can secure financing for your business vehicle before heading to the dealership. Preapproval from a lender like First Commonwealth allows you to budget your business expenses effectively by understanding your future financial commitments.

Prepayment Penalty
Some loans come with prepayment penalties, charging you for paying off the loan early. If you intend to settle your loan ahead of schedule, you might want to consider a different lender or negotiate to have the penalty removed. It's worth noting that First Commonwealth does not impose prepayment penalties.