Mandatory requirements to apply for commercial vehicle finance ...

Mandatory requirements to apply for commercial vehicle finance

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When preparing to complete the commercial vehicle financing application process, certain requirements are mandatory across the industry and expected by all commercial vehicle lenders. However, while mandatory, the parameters and specifics may vary from lender to lender. This is one reason why it is best to contact several lenders before committing to the financing process in order to find the commercial vehicle finance company that can offer you the best loan package for your unique business needs. The basic mandatory requirements are first to have an established company of preferably a minimum of two years in business. Although some lenders will finance purchase of commercial vehicles for a startup company, others prefer to avoid this risk altogether and work exclusively with businesses with a solid history. If the vehicle financing company does lend to newer businesses, it may go along with higher interest rates and more demanding qualification terms in the form of a larger required down payment, for example. Interested applications will need to provide proof of time in business, usually by proving the lender with Schedule C?s, your business license, or proof of your company from the Secretary of State. Another mandatory requirement is to have good to excellent credit, preferably 675 or greater. While some commercial vehicle financing companies will lend to those with less than stellar credit, these businesses will be subject to less than desirable financing terms that may not fit in with the businesses goals or be cost prohibitive. At worst, having bad credit may lead a business to deal with a less reputable lender with the potential to take advantage of uniformed or vulnerable new or struggling business. In some cases, a co-signer or guarantor may be an option to satisfying mandatory credit requirements. In addition to establishing the credit score of the business with a standard credit check, all businesses will need to provide additional proof of cash flow as evidence of ability to meet the minimum down payments, and monthly payments. Beyond these basic requirements the commercial vehicle lender will be calculating the fiscal health and strength of the business in terms of other financial obligations, debt, payments, etc. to ensure that at the end of each month the business is more than able to meet these obligations. This minimizes the risk on the part of the lender, who may request recent tax returns, bank statements, profit and loss and account sheets, current/prior loan repayment statements, etc. as proof. Finally, the lender may require the business to provide additional mandatory information. This varies from lender to lender and may include checklists, waivers, infosheets, and related documents to be filled out and signed by the business owner. It may inquire about the businesses size, location, fleet size, insurance provider, driving record, driver?s licenses, vehicle usage and care, etc. While some of these mandatory requirements may seem like nothing more than inconvenient roadblocks to your business goals, keep in mind that ensuring the financial health of your business comes first. By adhering to these requirements that help the commercial vehicle finance company avoid risk, you are also minimizing your own business risk.

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Source: http://trucklendersusa.wordpress.com/2013/01/11/mandatory-requirements-to-apply-for-commercial-vehicle-finance/

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