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Taxi Loans: How to Finance Your Taxi Business

Looking to own a taxi business? Find out what taxi loan options are available to you.

Owning a taxi company usually requires having some cash on hand. There are several costs you need to consider, including insurance, licences and taxi plates. If you don’t have the money available to get your taxi business going, you can consider a taxi loan. These are business loans that can help you establish your taxi business and get your drivers on the road. Learn more in our guide below.

What taxi loan options do you have for your business?

You have a few options to consider if you’re looking for a taxi loan to get your taxi business up and running:

  • Unsecured business loan. Some lenders offer business loans that are available to finance establishing a taxi business. These loans can be unsecured, which means you don’t have to provide any collateral.
  • Secured business loan. Some lenders may be willing to let you use an asset, such as property, as security for the loan. Secured loans usually come with more competitive interest rates.
  • Loan broker. If you don’t want to find the loan yourself, you can use the services of a business loan broker. These brokers can help you find the right taxi loan for your needs.

Compare loans for your taxi business in Canada

Name Product Interest Rate Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered
SharpShooter Funding Business Loan
Prime pricing from 9.00%
$500 - $250,000
6 - 120 months
$10,000 /month
100 days
Unsecured Term, Merchant Cash Advance, Invoice Factoring
To be eligible, you must have been in business for at least 100 days with a minimum of $10,000 in monthly deposits.

SharpShooter provides capital to small businesses that are underserved by banks and credit unions. It measures overall business health and potential rather than focusing strictly on traditional metrics. Fill out a simple application and get pre-approved in minutes. Receive your funds within 24 hours.
Swoop Funding Business Loan
4.00% - 25.00%
$1,000 - $5,000,000
3 - 60 months
$10,000 /month
24 months
Term, MCA, LOC & more
To be eligible, you must have been in business for at least 24 months and have a minimum of $100,000 in annual revenue.

Swoop partners with banks and alternative lenders to match your business with the right funding options. Register for free and browse your offers without affecting your credit score.
Lending Loop Business Loan
Starting at 4.96%
$1,000 - $500,000
3 - 60 months
$8,500 /month
12 months
P2P
To be eligible, you must have been in business for at least 12 months and have a minimum of $100,000 in annual revenue.

Lending Loop is Canada’s first regulated peer-to-peer lending platform. Complete an application in 5 minutes. Once you accept your loan offer, investors will begin to fund your loan on the marketplace. Your loan will be transferred to your bank account when it is fully funded.
OnDeck Business Loan
8.00% – 29.00%
$5,000 - $300,000
6 - 18 months
$10,000 /month
6 months
Secured Term, Line of Credit, Merchant Cash Advance
To be eligible, you must have been in business for at least 6 months with a minimum monthly revenue of $10,000.

OnDeck offers fast and simple financing. Apply in less than 10 minutes with your basic business information and see your loan offers without hurting your credit score. Get approved within 1 business day, and choose your term, amount and payback schedule once approved.
Loans Canada Business Loan
Prime Pricing from 9.00%
$2,000 - $350,000
3 - 60 months
$4,166 /month
100 days
Unsecured Term
To be eligible, you 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).

Loans Canada connects Canadian small business owners to lenders offering financing up to $350,000. Complete one simple online application and get matched with your loan options.
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Compare up to 4 providers

How can you compare your taxi loan options?

It’s important to compare your loan options to find the right one for you. Here are some questions to ask:

  • How much can you borrow? Taxi licences and plates can be expensive and you want to be sure you can borrow as much as you need to get your drivers on the road. Some lenders may only finance a percentage of the amount you need, so check this before you apply.
  • Is the loan secured? Some lenders will not accept taxi licences or plates as security, but you may be able to offer personal property or vehicles you own as security for the loan. If you don’t hold any high-value assets, you may need to opt for an unsecured loan.
  • What are the repayment terms? How long do you have to repay the loan? When and how do you make repayments? Can you repay the loan early without facing additional fees? These are all important questions to consider.
  • Who is the lender? You need to make sure the lender is reputable before you apply for a loan. Check real customer reviews and contact the customer service team to get a feel for how they treat their customers.
  • What can you use the funds for? You may want to use this loan for other taxi-related purposes, like improving the vehicles or setting up an office. Are you able to finance these on top of other costs? Can you purchase a new or used vehicle, privately or from a dealership?
  • Are you eligible? The different taxi finance options all come with varying eligibility criteria. Make sure you’re eligible before you apply.

Representative example: Ben buys a used car for his taxi business

Ben lives in Ontario and wants to start his own local taxi business. He decides to buy a used car, so he can save some money. However, city regulations prohibit vehicles manufactured more than 7 years ago from being used as taxis. Ben finds a 2017 Hyundai Elantra in good condition with relatively low mileage for $14,500.00 at a nearby dealership.

He makes a 20% down payment of $2,900.00 and heads to his local bank to get a business loan to cover the remaining $11,600.00 + $1,885.00 HST. He borrows an additional $1,000.00 to cover the licensing fee he needs to work as a taxi driver. Because Ben has a solid credit history, he is approved for a $14,485.00 auto loan with competitive terms.

Along with the cost of his loan, he also pays approximately $180.00 to register his vehicle with the province of Ontario – this includes the cost of license plates, a sticker and a vehicle permit. Note that, over the next few years, Ben will have to save enough money to replace his vehicle with a newer one so he can stay compliant with city regulations.

Cost of used car$14,500.00
Loan typeBusiness loan (term loan)
Loan amount$14,485.00
Interest rate (APR)4.90%
Loan term5 years
Additional fees4.00% origination fee ($539.40)
Payment $272.69 monthly or $125.73 biweekly
Total loan cost$16,361.40 with monthly payments or $16,344.90 with biweekly payments

*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.

taxi loan

How much does it cost to finance a taxi business?

Taxi businesses don’t come cheap, but they can be lucrative. Costs vary depending on the taxi licence required, the vehicle(s) you’re purchasing and the province or territory you reside in. Keep in mind that you may have additional costs associated with the business such as insurance, office space and phone lines.

Taxi laws are regulated at both the municipal and provincial levels, meaning restrictions and regulations vary across the country. Make sure you’re aware of any regulations in your area.

How much do taxi plates cost?

In most cities and provinces, taxi drivers are legally allowed to sell their plates to another party. This means the taxi licence plate market is not regulated. Some plates sell for upwards of $200,000, depending on the province and city.

Taxi plates are required across Canada, as well as valid licences. Some cities, like Edmonton, have restrictions on the number of taxi plates on the streets at one time, while other cities like Vancouver limit the number of licences available each year.

How much can you make with Uber?

If you’re interested in becoming an Uber driver, working out your income – minus expenses – will help you make your decision. You’ll also need to factor in things like hours, your schedule flexibility and wear and tear on your car to understand the total cost.

How much do Uber drivers earn? According to statistics, the typical income for a driver in Canada is between $16 and $26 an hour. However, that doesn’t include eventual expenses like gas and maintenance for your vehicle. Keep in mind that driving during busier hours like Saturday nights may make you more money than driving during slower hours when not many people are requesting rides and no surge prices apply.

How to finance a vehicle for your Uber business

Things you should consider when getting a taxi loan

Before you apply for a loan to finance a taxi business, be sure to consider the following:

  • Will you need collateral for the taxi loan? Some lenders require an asset to secure the loan, and not many use taxi plates as security due to volatile pricing and changes in regulation. Make sure you understand whether you’ll need to secure the loan and if you have an asset that can be used as security.
  • Do you need to make a deposit? Some lenders offering taxi loans may not cover all the costs or will require a deposit to approve the loan.
  • Have you got the legalities sorted out? Before you start a taxi business, there will be legalities to consider which may vary between not only provinces and territories, but also municipalities. You will need valid taxi plates to operate in Canada and you’ll need insurance for the vehicles you operate and your drivers will need taxi licences.

Frequently asked questions on getting taxi loans

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