Guide to Your Bad Credit Business Car Loan

Having reliable transportation is essential for your business, as it keeps revenue flowing and creates more opportunities for growth and expansion. However, securing financing with poor credit history can feel overwhelming when you’re trying to keep your business running smoothly.

This comprehensive guide will help you navigate the complex landscape of bad credit car loans, whether you’re a small business owner managing multiple employees, self-employed with different streams of income, or an ABN holder working as a sole trader.

Understanding your options can help you focus on building your business and your credit.

Business Car Loans Explained:

Bad credit business car loans are structured in a different way compared to personal car loans, so it is good to understand what a business car loan is.

A business car loan is a type of financing tailored for business owners, sole traders, or self-employed who need to purchase a vehicle specifically for business use.

The vehicle purchased with a business car loan is typically registered under the business name if you are PTY LTD, but if you just have an ABN under your name, then the loan would be registered under your own name.

Benefits of Business Car Loans:

Once you have been settled your bad credit car finance for your business, you can take advantage of the benefits of it such as:

• Preserving Cash Flow: Instead of purchasing your vehicle outright, financing allows you to spread the cost over manageable monthly repayments. This allows you to have more cash available for the essential areas of your business. By maintaining steady cash flow, you can continue operating and growing your business without putting unnecessary strain on your finances.
• Tax Benefits: You may the chance to deduct the interest on your loan and the depreciation of the vehicle from your business taxes. These deductions can help with reducing your taxable income, leading to potential savings at tax time. Additionally, if your vehicle is used solely for your business, expenses like maintenance, fuel, and insurance may also be a deductible, making this more cost effective for you.

Chance to Rebuild Your Credit:

Getting a bad credit business car loan isn’t just about getting the vehicle you need right now. It’s also a smart move that can really help improve your businesses credit’s score over time. The key benefit comes from making consistent, on-time payments.

Each payment you make gets reported to credit agencies such as Illion, Equifax, and Experian. Making on time repayments create a positive repayment history that sows other lenders you’re reliable and capable of managing your debt responsibly. Having your credit score improved can open the door for you to better interest rates and loan terms in the future.

Lite Doc:

Lite doc also known as low doc is designed for self-employer or business owners who may not have the traditional documentation required by most lenders. If you’re running your own business, whether as a sole trader or small business owner, it can be challenging to provide standard income verification such as recent tax returns, full financial statements, or payslips.

The flexibility with lite doc can be a great option for bad credit business car loans as when paired with a lender like Ume Loans, we specialise in credit challenged auto loans and can help you overcome the documentation hurdle and a less than perfect credit history.

Case Study:

Our Head of Credit Tim Henderson who has a wealth of experience across the finance and automotive industry shared an example of how his team was able to think outside the box when it comes to a bad credit business car loan.

We were recently able to assist a business with two new vehicles to add to their fleet to support the growth of their team. These vehicles were necessary to ensure our client’s business could meet demand. However, due to a Credit Card Default being listed on the Directors Credit File they were unable to seek funding via their usual channels. As we have no minimum credit score and the Director’s credit score is not the only factor we consider, we were able to understand the circumstances surrounding the default and draw strength from other areas to make the purchase of the two new business vehicles possible. This is an example of how we apply a common-sense approach to our credit assessments in order to get our customer approved and settled for the business car loan they need to keep their business on the road and operational.

Take Your Business to the Next Level:

Don’t let banks or other lenders hold your business back from succeeding. Apply now with our hassle-free process, so you can stay focused on the most important thing. Your business.