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How do business car loans work?
A business car loan allows business owners and directors to borrow money (as a lump sum) to purchase a business vehicle. This means you'll use the car at least 50% of the time for business purposes, including company cars, utes, vans, and trucks.
It works similarly to a standard car loan taken out by individuals, but is designed specifically for business owners. You repay the loan in instalments with interest over a fixed term. Remember, the longer your loan term, the more interest you’ll pay.
The vehicle you buy is used to secure the loan, meaning the lender can repossess the asset if you default. A secured business car loan is a type of chattel mortgage.
Here’s a quick snapshot of what you can get with a business car loan:
- Borrow anywhere from $10,000 to $1,000,000+
- Low fixed interest rates for prime business borrowers
- Loan terms from 1-7 years
- Finance for new or used vehicles
- Homeowners can get lower interest rates
- Available with or without a balloon payment option
- Claim GST credits & other tax deductions
- The vehicle is financed under your ABN, which means the business owns it
Client case study: A simpler, more cost-effective vehicle finance solution
Phil Collard, Asset Finance Broker
"A client approached us after receiving an expensive dealer finance quote on a new Ford Ranger Wildtrak for their construction business. As often happens, the quote had a low headline rate, but with high fees and a hefty balloon payment due at the end of the term.
With the vehicle already ordered, the client needed a fast, low-hassle settlement to avoid delivery delays. After reviewing their options, we sourced a more cost-effective, low-doc finance solution through our lender panel that leveraged the business’s strong trading history and asset-backed directors. The $60,000 loan was approved with minimal paperwork and no balloon.
From there, we coordinated directly with the dealership on behalf of the client to help keep the process moving and ensured settlement was completed in time for the delivery."
Phil Collard, Asset Finance Broker
What are the best business car loan interest rates?
Business car loan interest rates start from 7.49% p.a. among the lenders on our panel, with 11.51% p.a. being the average starting rate. Established businesses with a steady revenue stream and a good credit rating who are purchasing a new or almost-new vehicle will generally qualify for the best small business loan deals.
Startups and businesses without a proven trading history, or businesses financing an older or more specialised vehicle, may qualify for rates closer to 15% p.a. Consider getting the help of a business loan broker to ‘shop the rates’ between bank and non-bank lenders.
| Loan | Interest rates | Loan amounts | Loan terms |
|---|---|---|---|
| Angle Finance Business Loan | 7.49% - 8.49% | $5k - $500k | 3 - 7 years |
| BOQ Business Loan | 7.50% | Up to $250k | Quoted on application |
| Capital Finance Business Loan | 7.70% - 14.00% | $5k - $150k | Quoted on application |
| Liberty Business Loan | 7.95% - 17.45% | Up to $350k | 1 - 7 years |
| Moneytech Business Loan | 7.99% - 9.56% | $25k - $2m | Quoted on application |
| Dynamoney Business Loan | 8.10% - 19.40% | $2k - $1m | 6 months - 7 years |
| Group And General Business Loan | 8.29% - 8.89% | $10k - $350k | 1 - 5 years |
| Multipli Business Loan | 8.49% | $30k - $1m | Quoted on application |
| TruePillars Business Loan | 9.90% - 20.90% | $25k - $300k | 1 - 7 years |
| Finance One Business Loan | 11.45% - 23.45% | $5k - $250k | Up to 7 years |
Factors that impact your rate
1. The age of the vehicle you’re buying
New and demo vehicles generally attract the very lowest business car loan rates. That’s because newer vehicles usually have a higher resale value, which is less risky from a lender’s perspective. Used and specialised vehicles with limited resale demand (e.g. ice cream trucks) will attract the highest rates.
Our data shows around 45% of businesses apply to finance a brand new vehicle, with the remainder buying used.
Based on analysis by Money.com.au, most lenders have a cut-off of 12-15 years old for a secured small business car loan.
If you're buying a near-new vehicle, the rates available are generally still quite competitive relative to those on brand new/demo vehicles. Here’s an example of base rates from our broker network for new and used car business loans.
| Age of vehicle | Interest rate |
|---|---|
| 0 - 6 years | 8.55% p.a. |
| 7 - 10 years | 9.65% p.a. |
| 11 - 15 years | 10.25% p.a. |
2. Your business revenue
Businesses with a proven trading history and a steady income (or healthy balance sheet) generally qualify for lower business finance rates. Startups and businesses trading for less than two years may still qualify for a business car loan, but generally at a higher interest rate.
Our data shows that businesses with monthly revenue above $50,000 borrow almost twice as much to buy a vehicle ($79,604 average loan size across cars, utes, trucks and vans) compared to businesses bringing in less than $10,000 monthly ($41,166 average loan size).
3. Your credit score
Lenders may review your personal credit score and that of your company directors when assessing your application for a business car loan. They will generally look for missed payments, defaults and insolvencies (e.g. bankruptcies).
Based on our analysis of various business lending criteria, lenders generally look for a minimum director credit score of 500-600 and a minimum company credit score of 475-500. Generally, a higher credit score means a lower interest rate.
4. Your assets & liabilities
When determining your business car loan interest rate, lenders consider your business income and expenses, assets (such as business equipment or personal vehicles), and existing debts. As a general rule, the fewer debts and liabilities you have on your balance sheet, the more you can borrow.
5. Whether it’s a dealer or private sale
Some lenders prefer that you buy a business vehicle via a licensed dealer, as the purchase is usually backed by a statutory warranty. When buying a vehicle from a private seller, you might not receive a statutory warranty, although the manufacturer's warranty could still be valid, and there’s usually no cooling-off period. Some lenders may apply a rate loading of 0.50-1% to private sale purchases.
Money.com.au borrower data shows most businesses source their vehicle from a dealership, with only 24% going down the private sale route.
6. Whether you’re a homeowner
Lenders generally view borrowers who own their own home (or any residential property) as less risky than renters. That’s because homeowners are ‘asset-backed borrowers’ who can potentially borrow against their home equity to secure another loan or settle an outstanding debt. Homeowners can also generally borrow more than non-property owners and over longer terms.
Here’s an example from a lender on our panel:
| Property owner | Non-property owner |
|---|---|
| Credit profile: A* | Credit profile: A |
| Max loan amount: $150,000 | Max loan amount: $100,000 |
| Max loan term: 72 months | Max loan term: 60 months |
| Deposit required: No | Deposit required: Yes |
| Base interest rate: 10.45% p.a. | Base interest rate: 12.45% p.a. |
The average business vehicle finance amount in Australia is $59,820, with borrowers in Western Australia taking out the largest business car loans – $64,380, on average. That's according to a 2026 study by Money.com.au based on thousands of our commercial customers.
Who’s eligible for a business car loan?
Generally, the minimum eligibility requirements for a small business loan in Australia include:
- Australian citizenship or permanent residency
- An active ABN or ACN
- Your business must be GST-registered (depending on the lender)
- At least six to 12 months of trading history
- A minimum annual business turnover of $75,000 - $100,000
- The ability to provide financials or bank statements
- A good credit score — the minimum business credit score is 475; for company directors, it's about 500 (it could be less if you're a homeowner).
- Operate in a non-excluded industry (some lenders won’t lend to the likes of gambling-related businesses, debt collection companies and tattoo studios).
The majority of business car loan borrowers (57%) have been in business for more than three years, Money.com.au data shows. These borrowers are also generally able to borrow more: $62,083 on average, versus $50,564 for businesses trading for 12 months or less.
How to apply for a business car loan
Here's how to apply for a business car loan in Australia, from comparing options to submitting documents and gaining approval.
Compare business car loan options
Consider getting multiple personalised quotes from lenders through a finance broker. This will allow you to compare business car loan interest rates, fees and features without impacting your credit report. Keep in mind that your individual rate usually ends up being different to the lender’s advertised rate.
Prepare your application information
Lenders will ask for financial documents to verify your business revenue and some information about your business's structure, trading history and industry. Having this information ready will save you and the lender time. You can generally apply for a business car loan online through your lender’s application portal or via a broker who can submit your application on your behalf.
Submit your financial documents
Your lender will ask to review business financials, since you’ll be making repayments using business income. You may be asked to submit business bank statements from the last six to 12 months, as well as business registration and tax information (e.g. BAS statements, tax returns). You'll have to confirm your identity by uploading some identification documents (e.g. driver’s licence or passport).
Wait for your business car loan to be approved
Your lender will evaluate your ability to repay the loan based on your business financials and will conduct a credit check. You may be granted conditional approval until you find a vehicle to buy and sign a purchase agreement. The lender will then verify that your chosen vehicle meets the finance eligibility criteria and approve your business loan application if everything checks out.
Financial documentation required for a business car loan application
| Minimum time in business | Financial documents required | Other requirements | |
|---|---|---|---|
Established business | More than 5 years | Two years of financials + 3 months of bank statements | Financials must be prepared by an accountant |
Business with low documentation | More than 2 years | Latest BAS statements + 3 months of bank statements | Must be a homeowner or have a 10% deposit |
New business/startup | Less than 2 years | 12 months of cash flow projections (prepared by an accountant) + 3 months of bank statements | Must be a homeowner or have a 10% deposit |
Sole trader | Up to 2 years | 2 payslips + 3 months of bank statements | Payslips must show ability to repay the loan |
Save time by finding the right business car loan option first time
Phil Collard, Asset finance expert
“Time is money for businesses, so it’s worth checking which type of business car loan you’ll qualify for before you spend time applying (and potentially needing to reapply). More often than not, business owners who don’t own a home and who’ve been operating for less than 12 months will have limited options, compared to business owners who own a home and profitable business.”
Phil Collard, Asset finance expert
Should I get a business car loan with a balloon payment?
Some business car loans may have the option to include a balloon payment. This is a lump-sum residual repayment you pay at the end of the loan term to clear your remaining loan balance. The balloon payment can range from 20%-40% of your loan amount depending on what you agree with the lender.
Choosing a balloon payment option reduces your regular repayments, which can help free up cash flow for the business. But you’ll have a lump sum remaining at the end of the loan term. You’ll also pay more interest over the life of the loan if you include a balloon.
According to Phil, the correct structure on a business car loan should not be underestimated.
"If you're in the market for a new ute, for example, but don’t typically keep your vehicles for more than a few years, a five-year loan term with a large residual/balloon at the end may not be the best option for you.
"In that scenario, an upfront deposit may be something to consider. This will help make repayments more manageable, keep overall costs low and potentially give you the option to structure the loan over a shorter period to tie in with your expected ownership period."
Business car loan with & without balloon payment
| Car loan with balloon payment | Car loan without balloon payment | |
|---|---|---|
Loan amount | $50,000 | $50,000 |
Loan term | 7 years | 7 years |
Interest rate | 8% | 8% |
Balloon payment | $10,000 (20% of loan amount) | $0 |
Monthly repayment | $690 | $779 |
Total interest payable | $17,970 | $15,462 |
Total to be repaid | $67,970 | $65,462 |
Cost difference | +$2,508 |
Business car loan GST & tax benefits
The interest on your business car loan and other expenses related to owning and running a business vehicle, like depreciation, may be tax deductible as ‘business expenses’, according to the ATO. If your business is registered for GST, you may also be able to claim a credit for the GST included in the price of the vehicle (provided you have a tax invoice) in your Business Activity Statement (BAS).
The GST credit you can claim is capped at 1/11th of the car limit for depreciation set by the ATO each year.
- For 2026-27, the car limit for depreciation is $69,883.
- The maximum amount of GST you can claim during that year is 1/11th of that cost limit — $6,353.
You can only claim a GST credit on the portion of the vehicle's cost related to business use. For example, if you use your vehicle for business purposes 51% of the time, you can only claim a credit of 51% of the GST you paid. Speak to your accountant about which tax benefits may apply to your business.
Maximum GST credit amount & car value limit
| Financial year | Maximum GST credit | Car value limit |
|---|---|---|
2025-26 | $6,334 | $69,674 |
2024-25 | $6,334 | $69,674 |
2023–24 | $6,191 | $68,108 |
2022–23 | $5,885 | $64,741 |
2021–22 | $5,521 | $60,733 |
2020–21 | $5,376 | $59,136 |
What fees do lenders charge on a business car loan?
Car loans for businesses also come with fees that can quickly turn a cheap-looking loan into a major expense for your business. These fees may be tax deductible, but nonetheless are worth minimising. Here are the most common business car loan fees to watch out for.
- Establishment fee: $150 - $550
- Documentation fee: $150 - $495
- Monthly account keeping fee: $0 - $10
- Extra repayment fee: Depends on loan amount & loan term
- Early payout fee: $0 - $450
Other business car finance options
Chattel mortgage
A chattel mortgage is another term for a business car loan. It works like a secured car loan where you borrow a lump sum of money that you repay with interest over a fixed term. A chattel mortgage can also finance the purchase of business equipment, including machinery, mining equipment, kitchen equipment for restaurants, etc.
Finance lease
This is when the lender buys the vehicle on your behalf and leases it back to you in exchange for regular payments over a fixed period. You’ll have the option to buy the asset and assume full ownership of the car, trade it in, or opt for lease refinancing. A finance lease is generally used for long-term high-value assets like company vehicles and heavy machinery.
Operating lease
With an operating lease, the lender will buy the vehicle on your behalf and rent it to you in exchange for regular payments over a fixed period of time. You can upgrade the asset or equipment during the lease term, but you do not get ownership of it.
Personal car loan
You may be able to get a personal car loan for vehicles you use for business-related activities less than 50% of the time, like if you're a real estate sales representative or tradie. This option may be popular with self-employed individuals and sole traders.
Novated lease
A novated lease finances a vehicle for an employee's business and personal use, but the vehicle is not owned by the business itself. Lease payments are made from the employee's salary using pre-tax income. This option isn't available to sole traders or businesses without employees.
Commercial hire purchase
With a commercial hire purchase, the lender buys the vehicle and rents it to your business, with fixed repayments over an agreed term. Ownership only transfers once you make the final payment (or a balloon payment, if included). It's a common alternative to a chattel mortgage for businesses that prefer to delay ownership.
Ready to compare business car loans?
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