6 Important Documents You Need as a Business Owner to Get a Car Loan in the United States
Opinions and feedback on Collected.Reviews believe that finance companies, banks and credit unions offer different kinds of loans to firms or businesses of all sizes.
SBA (Small Business Administration) are said to work closely with so many lenders to help all kinds of business owners get a car loan or other types of loans. As a business owner in need of a car loan, you must prove to the lender that you and your business can afford the car payment. All lenders standards vary but most lenders require borrowers to produce a wide variety of business related and personal documents.
As a business owner seeking to get a car loan in the United States there are so many websites you can visit so as to check out reviews about loan providers. Also this article will provide you with some important documents you need to successfully go through the car loan process as a business owner.
1. Ownership Documents:
One of the frequently or most asked documents by lenders is the ownership document. You should be able to provide this document to your lender. It should at least show your 20 percent ownership stake in the firm or business. And for some other businesses, you might need to provide your partnership agreement, a business license or limited liability company document. And in some States like Kansas, you can simply provide your lender with your personal information and your business or firm name. Also your lender might request for your business tax identification number.
2. Collateral Documents:
Vehicles tend to lose value over the time meaning they are depreciating collateral. Most times lenders impose age restrictions on financed vehicles and do not allow borrowers to finance a car that is more than 7 years old. Lenders must provide their bank or borrower with evidence that the car suits their stated business need.
3. Business Document:
Many banks have their different requirements for business loans, meaning you can only finance a car if you’ve been in business for at least two years. You might need to provide the bank or your lender with at least two years of cash flow statements.
4. Balance Sheet:
The balance sheet is a document which shows the overall position of the firm in terms of financial performance. It will represent your business’ current liabilities, sources of equity and assets. All of these are very important to the bank or lenders.
5. Income Statement:
This document gives a report of how your business has experienced cash flow within the years. It is usually divided into columns of expenses and revenues. Lenders usually take a great deal of interest in the income statement of a firm, as it shows them how the company is doing in terms of cash inflows and outflows over the years.
6. Tax Returns:
This shows how your business has been performing over the years. To be on the safe side, make sure you balance maximizing deductions and also maintain the image of consistent revenue while filing your taxes.
As a business owner seeking a car loan, you should know that the more information you are able to provide to lenders, the easier it will be for your loan to get quickly approved. And you should also note that paperwork may vary depending on the lender or financing option you choose.