Compare business vehicle financing options

Get access to the funds you need to buy your next business vehicle, and learn how to turn your vehicle costs into tax savings.

Updated

Fact checked

The right vehicles are essential to the functioning of many businesses, offering the mobility and portability you need to operate successfully. However, when it comes to finding the funds to purchase your next business vehicle, there is a wide range of vehicle finance options you can choose from. This includes a range of leasing and loan options. Each option has its own benefits and drawbacks, so read on to discover which one may be right for you.

SharpShooter Funding Business Loan

  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $300,000
  • Interest Rate: Fee based, Prime pricing starting at 9.00%
  • Requirements: Annual business revenue of $50,000
  • Free online loan quote
  • Borrow up to $300,000
  • Quick application process

SharpShooter Funding Business Loan

SharpShooter Funding offers loans up to $300,000 for small business owners who have been business for at least 100 days and can show a minimum of $4,166 in monthly deposits ($50,000/year).

  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $300,000
  • Interest Rate: Fee based, Prime pricing starting at 9.00%
  • Requirements: Annual business revenue of $50,000
Promoted

What is business vehicle financing?

Business vehicle financing refers to several different borrowing options that can help cover the cost of a new car, truck, van or other vehicle for business use. Your options are similar to auto loans, but you might not have the same selection of lenders and could have to meet different application requirements.

Which type of financing works best for your business depends on a range of factors including its financial situation, taxation needs and whether you’ll use the vehicle solely used for business purposes or a mix of business and personal use.

Compare your options for vehicle financing

Name Product Min. Loan Amount Interest Rate Fees Loan Term Min. Credit Score
CarsFast Car Loans
$500
4.90% to 29.90%
Varies by lender, loan type and province
12 months - 8 years
300
Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs. Apply online to purchase a new or used vehicle and get the vehicle delivered to your door.
Car Loans Canada
$7,500
3.99% to 29.90%
Varies by lender, loan type and province
12-84 months
300
Search thousands of vehicles online, including $0 down options, from dealers across the country and get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
Loans Canada Car Loans
$500
0% to 29.99%
Varies by lender
3-96 months
300
Get access to financing from multiple lenders across Canada through a single application with Loans Canada. Bad credit, CERB and EI borrowers are considered.
Carloans411 Car Loans
$500
1.90% to 19.99%
Varies
Up to 72 months
300
Get connected with suitable lenders through CarLoans411. Finance your next car, van or truck with loans available in amounts from $500 to $50,000. Check eligibility for this loan through LoanConnect.
LoanConnect Car Loans
$500
10.00% to 46.96%
Varies by lender, loan type and province
6-60 months
550
Get access to 25+ lenders through LoanConnect's brokerage. Receive pre-approval in as fast as 60 seconds and get your funds in as little as 24 hours.
Auto Arriba Car Loans
$3,500
8.99% to 29.50%
Contract fee of $499.00
6-84 months
N/A
Auto Arriba offers car loans starting at $3,500 up to $100,000, with as little as a 30 minute loan turnaround time. On a limited number of approved loans, Auto Arriba is currently offering a rebate of the amount of your first scheduled payment 30 days after it has been processed up to a maximum of $500.
Fairstone Secured Personal Loan
$5,000
19.99% to 23.99%
Varies by province
3-10 years
560
Fairstone offers secured personal loans up to $35,000.
loading

Compare up to 4 providers

Name Product Interest Rate Min. Loan Amount Max. Loan Amount Loan Term Minimum Revenue Min. Credit Score Filter Values
SharpShooter Funding Business Loan
Fee based, Prime pricing starting at 9.00%
$1,000
$300,000
6 months - 5 years
$4,166 /month
500
SharpShooter Funding offers loans up to $300,000 for small business owners who have been business for at least 100 days and can show a minimum of $4,166 in monthly deposits ($50,000/year).
OnDeck Business Loan
8.00% – 29.00%
$5,000
$300,000
6 - 18 months
$10,000 /month
600
OnDeck offers loans up to $300,000 for small business owners working in approved industries who have been in business for at least 6 months with a minimum monthly revenue of $10,000.
Loans Canada Business Loan
Prime Pricing from 9.00%, Long term financing from Prime + 2.00%
$2,000
$350,000
3 months - 5 years
$4,166 /month
410
Loans Canada connects Canadian small business owners to lenders offering up to $350,000. Borrowers must have been in business for at least 100 days, have a credit score of 410+ and show a minimum of $4,166 in monthly deposits ($50,000/year).
loading

Compare up to 4 providers

Representative example: Anna buys a food truck

Anna, a resident of Ontario, wants to buy a food truck and start her own business. She finds a 16′ brand new truck with a fully loaded kitchen for $39,000.00 + 13% HST ($44,070.00 total). Along with her other startup costs – including food, beverages, supplies, permits and licenses, advertising, uniforms and other expenses – she figures she’ll need about $55,000.00 to get up and running.

Anna applies for a business loan from an online lender. Thanks to her solid personal credit score of 810, she is approved for financing with competitive terms. Along with the cost of her loan, Anna also pays around $300.00 to register her truck with the province of Ontario – this includes the cost of a license plate, sticker and vehicle permit.

Cost of food truck + other startup costs$55,000.00
Loan typeBusiness loan (term loan)
Loan amount$55,000.00
Interest rate (APR)8.40%
Loan term5 years
Additional fees4.00% origination fee ($2,200.00)
Monthly payment $1,125.76
Total loan cost$67,545.60

*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.

How does business vehicle financing work?

Business vehicle financing works a lot like other types of auto loans. If your business doesn’t want to pay for a vehicle upfront, financing kicks in to break up the cost into more manageable payments that you pay over a period of time plus interest or fees.

How commercial vehicle finance works depends on which type of financing you go for. Some options allow you to borrow a vehicle from a dealer without ever owning it. Other options allow you to purchase the vehicle in full.

What are my business vehicle financing options?

Your business has a number of vehicle financing options to choose from, though it’s rare to find a lender that offers all at once. Use the following list to help you decide which is best for your business and start your search from there.

Business auto loan

A business auto loan allows you to buy the vehicle under your name or your business’s name and then pay the lender a fixed monthly repayment. If you take out a loan in your business’s name, your lender might require a personal guarantee from all business owners if your business’s finances aren’t strong enough.

You can get business auto loans from online lenders, banks, credit unions and even directly from the manufacturer or dealership. These loans tend to require a down payment of around 10% to 20%.

Lease

This option allows your business to use of a commercial vehicle without ever owning it. The lender purchases the vehicle on your behalf, and then leases it back to you. You then make monthly lease payments until the term of the lease is up.

Once your lease is over, you typically have the options to pay off the remaining value on the lease and take full ownership of the vehicle, trade the vehicle for a new one in or look to refinance the lease.

Commercial line of credit

Need financing for more than one vehicle? Some lenders allow you to use a business line of credit that you can use to buy or lease multiple cars, trucks, vans and more to help you build your fleet.

You’ll only have to get approved once so you won’t have to spend all that time waiting to get approved for each individual vehicle. However, your business will likely need to have strong credit and a consistently high revenue to qualify.

Canada Small Business Financing Program (CSBFP) Loan

Having trouble qualifying for traditional vehicle financing? Your business might be eligible for a CSBFP loan to help cover the costs of getting a business vehicle. These loans can be applied for through a chartered bank, credit union or a caisse populaire and are at least 75% backed by the Government of Canada. Your business must make under $10 million in revenue annually to be eligible for this program.

Heavy-duty vehicle financing

These are designed specifically for large trucks and other heavy-duty vehicles, which you might have difficulty financing with your typical car loan.

Like with the commercial line of credit, your business can use this option to build your fleet but typically requires your business to have been around for at least 2 years, have strong credit and consistently high revenue.

Specialty vehicle financing

This option is best for businesses looking to modify a vehicle or buy specialty equipment — what you can’t typically get at an auto dealership. Specialty financing can help your business buy equipment to make better use of vehicles your business already owns, like a wheelchair lift, crane or towing equipment. Some lenders allow you to combine this option with a lease or auto loan.

Personal loan

A personal loan gives you access to funds you can use for a variety of purposes, ranging from improving your home to buying a car. This option can be great if you plan to use the car for personal and business use. Treat it as a last resort, however: Personal loans tend to come higher interest rates and fees than some other business vehicle financing options.

Starting a taxi business? Compare taxi loans

How can I find the best vehicle financing for my business?

  • Terms. The length of the term of your vehicle finance arrangement will influence how much money you have to pay in order to gain ownership of a commercial vehicle. Many finance options allow terms of between 2-7 years, so compare the terms available and find an option that suits your budget and needs.
  • Interest rate. What interest rate will you be charged under your vehicle finance arrangement? The higher the rate, the more you’ll have to pay in interest charges. Will the rate be fixed or variable, offering either the security of knowing what your repayments will be or the chance to take advantage of possible falling rates?
  • Repayment options. Look for a vehicle finance option that allows you to tailor repayments to suit your budget. Some offer fixed monthly repayments which provide security, while others may allow you to choose a more flexible repayment schedule.
  • Tax requirements. Claiming the expense of buying a vehicle as a tax deduction varies greatly depending on which vehicle finance option you choose. You may also be able to include depreciation deductions depending on the option you choose. See below for more information.
  • Fees and charges. As with any financial product, it pays to familiarize yourself with any fees and charges attached to a vehicle finance option. They may not seem like much at first, but these expenses can add up to a lot of money in the long run.

Buying vs. leasing a vehicle for your business

Buying a vehicle means you’ll own it once you’ve paid for it in full. Leasing means you can use it for a fixed amount of time without getting all of the benefits and drawbacks of ownership. Here’s how the two options stack up.

Buying a vehicleLeasing a vehicle
Typical initial costDown payment of around 10% to 20% of the cost of the vehicle.Security deposit of the first month’s payment. (You may be able to make a larger down payment to reduce your monthly payments.)
OwnershipYour business owns the car as soon as the paperwork is signed.Your business can buy the car after your lease is up for a large balloon payment.
Tax benefitsYour business can deduct part of what was paid to buy and use the vehicle. Learn more below.Your business can deduct part of what was paid to lease and use the vehicle. Learn more below.
MaintenanceYour business is responsible for maintenance costs.You might be charged a fee if your car needs excessive maintenance once you’re done with it.

How to claim business vehicle expenses on your taxes

If you own or lease a business vehicle, the CRA will allow you to lower your taxes by claiming 2 types of expenses: vehicle depreciation and the cost of using and maintaining your vehicle. Vehicle depreciation is the decrease in your vehicle’s value over time and is claimed on your business taxes as “capital cost allowance” or CCA. Other costs associated with using and maintaining your vehicle – such as gas, repairs, mileage, insurance, car loan interest fees and licensing/registration fees – can be claimed as “motor vehicle expenses.”

You can’t claim these amounts fully. Only a certain portion of your vehicle’s depreciation and expenses are claimable, except for parking fees and supplementary car insurance, which can be 100% claimed as motor vehicle expenses.

The CRA has very specific rules for calculating the amount of your claims. These are explained below:

Are there any risks involved with business vehicle financing?

As with any financing option, one of the most important thing to avoid is getting in over your head. Having debts pile up on top of one another can hurt your business, so make sure you can afford a vehicle finance arrangement before you sign up to it.

Another common pitfall is simply not understanding the range of vehicle finance options available and selecting one that doesn’t suit your business’ needs and budget. Enlisting the services of an accountant can help.

Where can I get more information?

To find out more about financing your business, check out our detailed guide on business loans. We’ll tell you about different types of loans, how to apply, costs involved, alternative financing options and more.

Frequently asked questions

More guides on Finder

Ask an Expert

You must be logged in to post a comment.

Go to site