Inside the Business Auto Loan Approval Process

Don P.

An auto loan business provides loans and financing to individuals and businesses that are seeking to purchase a new or used vehicle. Business auto loans are specifically designed to meet the needs of companies that need to establish fleet leases or provide cars to certain executives as an employee benefit. The business auto loan approval process is designed to assist the business in obtaining a favorable loan at a rate that is competitive.

The business auto loan approval process involves asking questions of the borrower to determine the type of vehicle being purchased and the purpose for the purchase. Many businesses use vehicle for executives, sales representative and service technicians. The vehicles help the business accomplish their work and deliver products and services to their customers.

Fleet Vehicles

A fleet vehicle lease is a typical type of auto loan that is pursued by businesses that are involved in shipping and other forms of transportation services. The business auto loan company works to provide the company with different leasing options that accomplishes their business needs. The lender can seek different companies that offer lease options and package a loan deal that meets the needs of the company.

The Business Auto Loan

The elements of the business auto loan approval business include loan officers, underwriters and appraisers who look at the application and determine the best rates and terms for the borrower. The rates, terms and conditions offered to the borrower are based on the initial meeting between the loan officer or finance manager and the borrower. This initial meeting determines need and matches the borrower with the right lender.

The Process

After the initial meeting, the finance manager submits the application to an underwriter who further assesses the risk and provides an offer. The appraiser assigns a value to the vehicles being leased or purchased, which the company uses as part of their capital budget. The company uses the information from the lender to depreciation the value of the vehicles acquired and writes down that cost of a period of time. This process is known as amortization.

Much of what takes place in the process for providing financing for businesses to purchase autos is the same as it is for individual buyers. The differences in the process are due to the needs of the business and how the vehicle is treated for the purpose of taxation and valuation. This process is streamlined for businesses in order to make the process easier.


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