There are numerous businesses that depend heavily on commercial vehicles. For instance, construction companies require large trucks to move materials and tools to job sites. On the other hand, delivery companies need mini-trucks and vans to transport packages to customers. Without proper commercial vehicles, it can become difficult for a business to transport its services and products to the customers as it would invariably impact its growth in a negative manner.
Opting for Commercial Vehicle Loans
While the uses of commercial vehicles are many, a lot of businesses, especially the new ones, may not have enough working capital to fund these automobiles. In such cases, they can either rent a vehicle or take a loan to purchase it. Leasing commercial vehicles can be a good short term solution, but it is not feasible for the long term. Moreover, having your own vehicle is necessary to have more control over your delivery schedules and improve the ability to meet customer demands. This brings us to commercial vehicle loans. These loans are designed to help businesses finance the purchase of vehicles that are meant to be used for commercial purposes. You can apply for commercial vehicle loan to purchase trucks, mini trucks, tractors, vans, buses, and more.
Commercial vehicle loans usually have different terms and conditions than typical car loans. The loan amount and terms are also heavily dependent on the creditworthiness and financial situation of the borrower, and the policies followed by the lender.
7 Advantages of Commercial Vehicle Loans
1. Low Down-Payment
Down payment implies to the sum of money that you would have to pay upfront while buying a commercial vehicle. The rest of the purchase price would be financed with the help of a commercial loan. A large number of lenders today do not have high down payment requirements and can finance a large chunk of the cost of your vehicle.
2. Attractive Interest Rates
You can avail commercial vehicle financing at a pretty reasonable rate of interest. This will make sure that the loan does not become a financial burden.
3. Financially Viable
There are a lot of businesses that cannot afford to pay the cost of a commercial vehicle at once. Commercial vehicle loans would enable you to split the cost of the purchase of your commercial vehicle over multiple years. This makes the purchase more viable financially for most businesses.
4. Fixed Payments
Commercial vehicle loans have fixed monthly payments. This makes it fairly easy for businesses to plan their finances and budget accordingly.
5. Improved Cash Flow
Businesses can competently improve their cash flow and retain more capital for other investments or expenses by choosing to spread out the cost of the vehicle over the life of the loan.
6. Fast Disbursal
Many modern lenders make use of technology to streamline their processes and are able to disburse loan amounts pretty fast. Hence, you do not have to wait too much for the loan amount to be disbursed, after submitting your application and relevant documents, and can buy the commercial vehicle you need as fast as possible.
7. Flexibility
The loan amount, tenure, and repayment terms of commercial vehicle loans can be customised to meet the needs of a business.
By taking out a commercial vehicle loan and buying the required automobile, you will become its sole owner. This shall provide you with full control and flexibility over how it is used and maintained.
Types of Commercial Vehicle Loans
- New Commercial Vehicle Loan: This is the most common type of commercial vehicle loan. It is provided to customers for the purpose of buying new commercial vehicles. Usually, lenders provide finance up to 100% of the ex-showroom price of heavy commercial vehicles like buses and trucks, while finance up to 94% of the on-road price is offered for light commercial vehicles like vans.
- Old Commercial Vehicle Loan: Old or used commercial vehicle loans can be taken if you plan to buy pre-owned or used commercial vehicles. In this type of loan, you can expect funding for up to 90% value of the asset. As pre-owned vehicles cost less than brand new ones, going for this option can be a good idea for business owners who are on a tight budget.
- Commercial Vehicle Refinancing: Under this option, lenders ideally provide a loan on an existing vehicle that is free of loan or take over an existing commercial vehicle loan and offer additional finance for it on the basis of eligibility.
Banks, non-banking financial companies, and other lenders provide commercial car loans to a vast array of customers to meet their business requirements, starting from private and public limited companies to large, medium, and small-sized fleet owners. You need to go through multiple commercial loan options, research the lenders, and compare the interest rates to find the loan scheme that effectively aligns with your interest and budget range.
