Commercial Vehicle Refinance: What to Know

You might be able to refinance a business auto loan to improve your cash flow or find better loan terms for your business vehicle. Some lenders refinance passenger vehicles for business use, but true commercial loans, when the vehicle is titled in the name of your business, can have different rules.

‍

Find out if auto refinancing is the right choice for your commercial vehicle and learn how it works.

‍

Key takeaways

• You may be able to refinance a commercial auto loan using a commercial vehicle refinance.
• Commercial vehicle refinancing may help your business save money or improve cash flow.
• When you refinance a business auto loan, you’re replacing the existing commercial loan with a new one.
• Commercial vehicle refinances require business documentation and business financial information when applying. 
• It may be possible to refinance a personal vehicle you use for business, but the details vary based on business structure and ownership.

‍

Can you refinance a commercial vehicle loan?

A commercial auto refinance is different from personal car loan refinancing. Your personal car is the one you use to run personal errands, visit friends, or travel for leisure. 

‍

A commercial vehicle is used for business purposes, such as: 

• Meeting clients
• Delivering products
• Hauling business equipment
• Transporting tools and materials
• Traveling between job sites 

‍

Your vehicle may be considered commercial if:

• Its primary purpose is business-related
• It’s owned or leased by your business
• Your business name is on the registration
• You have a commercial auto insurance policy 

‍

You’ll typically need a commercial auto lender to refinance a business vehicle. 

‍

How commercial vehicle refinancing works

Refinancing a commercial vehicle pays off the old loan with a brand-new loan, often with better terms. 

‍

To refinance a business auto loan, follow these steps:

‍

• Check how much is left on your current loan: Request a payoff quote from your lender for the exact amount.
• Shop around for a new lender: You’ll want to gather rates from multiple lenders to find the best deal. Don’t forget to compare fees and repayment terms, too.
• Fill out the loan application: You’ll need to provide information about your business, and the lender will check your credit.
• Finalize your new loan: After the lender verifies the information you provided and approves your application, you’ll sign the loan agreement and receive your funds. Then you or your new lender can pay off your outstanding commercial auto loan.

‍

How to refinance a car in your business name

Perhaps you’re starting a new venture and want to use your personal car as a business vehicle instead. Or say you already use your car primarily for business reasons. It may be possible to refinance it in your business name. 

‍

Look for lenders who offer commercial auto refinancing. Your business will be applying for the loan, so you’ll provide business income information to qualify. 

‍

If you’re approved, the lender may pay off the personal auto loan for you and help you transfer the title to your business name. After the title is updated, you’ll also need to change your registration to reflect the commercial use and switch to a commercial auto insurance policy.

‍

Requirements for commercial auto refinancing

When you apply for a commercial vehicle refinance, the lender will need to see documentation about your business, your car, and your current loan. Commercial auto refinancing requirements typically include:

• Business employer ID number (EIN)
• Business formation documents, such as LLC paperwork
• Several months of business bank statements
• Tax returns or profit and loss statements
• The car’s Vehicle Identification Number
• Title
• Proof of insurance
• Driver’s license
• Current loan statement and payoff amount

‍

Some lenders may require a personal guarantee on the loan, too, which will require a hard credit check on your personal credit report. That’s especially true if the business is new or has limited business credit.

‍

Refinancing by vehicle type: What to expect

The type of vehicle you want to refinance and who owns it — you or your business — will affect your refinance options. 

‍

If you use your personal vehicle for business, your options may depend on your business structure. As a sole proprietor, for instance, you and your business are the same entity. That means you may be able to use either a personal auto refinance or a commercial auto refinance, depending on your credit and business financials. 

‍

If your vehicle is owned by corporation, partnership, or limited liability company (LLC), you’ll generally use a commercial auto lender to refinance.

‍

‍

Explore all your options for refinancing

A commercial vehicle refinance could help your business lower its monthly costs or save money on interest rates. Make sure you understand your existing loan and how your business structure could affect your refinance options. 

‍

RefiJet offers resources on all things auto refinance, including a comprehensive guide to auto refinancing that breaks down the process step-by-step. See how much you could save by refinancing when you enter your loan numbers into an auto refinancing calculator. And always shop around to find a lender that offers an auto refinance loan that fits your budget.

‍

FAQs

Below are some of the most commonly asked questions about refinancing commercial vehicles.

‍

Can you refinance a commercial vehicle?

Yes, you can refinance a commercial vehicle. Many business owners choose to refinance their business car or truck to save money on interest, improve cash flow, or find better loan terms.

‍

How does commercial vehicle refinance work?

When you refinance a commercial vehicle, you’ll replace your existing business auto loan with a new one. That involves shopping around for lenders, filling out a loan application and providing details about your business and the vehicle.

‍

Can you refinance a business auto loan?

Yes, you can refinance a business auto loan. You’ll need to find a lender that offers business auto loans and provide financial info about your business when applying. 

‍

What do you need to refinance a commercial vehicle loan?

Make you sure you have the VIN and title for the vehicle, a driver’s license and proof of insurance, and business financial documents like bank statements or tax returns.  

‍

Do lenders allow refinancing for vehicles titled in a business name?

Yes, some lenders allow you to refinance a vehicle that has been titled in the name of a business.

‍

What is the difference between a commercial vehicle and a standard auto refinance?

Standard auto refinancing is for personal vehicles — the car you drive on personal time. A commercial vehicle refinance is specifically for vehicles owned and registered by a business.

‍