Businessman Driving Car

Business financing for vehicles is not only for large business. Small businesses, consultants and salespeople have the need to finance personal-type vehicles and small delivery vehicles for their business use. Before financing these vehicles you should consider the following factors.

What factors could affect your finance rate?

Financing can generally be done two different ways, either through First Commonwealth or the dealer. There are a few factors to consider prior to comparing pricing.

  • Are you buying new or used?
  • If used, how many miles are on the vehicle?

These two factors will affect the rate you will be charged and the number of years you can finance the vehicle.

Who will finance your vehicle?

Some dealers simply do not have the systems and financing sources in place to finance commercial loans. Contact First Commonwealth Business Services when you know what type of vehicle you are purchasing.  We can discuss rates and terms with you to help you get the best deal.

Financing terms to understand prior to buying

As an owner of your business, you will likely be required to personally guarantee the vehicle loan. It is important to understand the difference between a co-borrower and a guarantor.

  • Co-borrower  If you are a co-borrower the loan will most likely report to your personal credit report. This will affect things like your debt to income ratio and other items if you attempt to do loans personally.   
  • Guarantor  As a guarantor, you are pledging that if the business does not repay the loan you personally will make sure the loan is paid. This would be considered a contingent liability to you personally but not report to your credit report.
  • Prepayment Penalty  Some loans have a prepayment penalty and charge you for paying ahead. If you plan on paying off the loan early, you may want to either choose a different lender or negotiate to remove the penalty.

First Commonwealth does not impose prepayment penalties. First Commonwealth offers commercial vehicle financing for all types of vehicles with competitive rates and terms. If you are in the market for a new business vehicle, please contact our Business Services department today at 610.997.6381 to discuss financing for your commercial vehicle loan.

by: Steven Mertz - First Commonwealth's Vice President Business Services