According to a recent survey by Manta, 54% of small businesses need a vehicle to serve their customers. But is funding a business vehicle a good idea? Experts say yes. Owning a business vehicle can help you expand your network, create an authoritative impression, and boost branding advertisements.
However, using a business vehicle requires budget considerations and it is important to determine where to invest. To know more about finding the right investment for a business vehicle, here are four practical ways to fund your next business vehicle.
Pay In Cash
If you have the funds to buy a vehicle now, consider paying for the full sum in one payment. That way, you won’t have to pay interest on monthly payments, which helps save you the most money. When paying in cash, it is also important to choose the right kind of vehicle for your services. Just be sure to choose a model that matches your brand and budget for both the vehicle and its long-term maintenance.
Consider Getting A Business Auto Loan
Applying for a small business aunt loan, also called a commercial auto loan, helps businesses looking to finance a vehicle purchase. If you’re looking to buy a truck or car to scale your business, it is important to understand how this loan works and what happens if you can’t repay the debt. It is also possible to qualify for a business auto loan if you have limited or no credit.
Use A Business Credit Card
The National Small Business Association revealed that 59% of small businesses had to use credit cards to finance their operations, including vehicles and equipment. When choosing the right credit card for your business, choose the one with 0% introductory APR. This means that as long as you’re able to pay a monthly balance, or at least by the end of the first year, you’re getting a free loan. However, it is important to finance wisely to avoid a cash drain.
Ask Family or Friends
Consider asking family or friends for a personal loan. After all, this method is a common way for business owners to finance their operations. However, one mistake that owners make is treating this investment as a casual agreement due to your personal relationship. Keep in mind that it is still important to maintain a professional treatment when handling an investment or loan from family or friends.
As with any financing option, the most important factor to avoid is getting over your budget – and head. Building a pile of debt can hurt your business, so be sure that you can afford your vehicle finance arrangement before you sign the contract.