August 04, 2021
Taxi Loans: How to Get a Loan for Your Taxi Business
Taxi business financing can help you throw that door wide open. Among other things, taxi loans enable business owners to:
- Purchase more taxis
- Hire more drivers
- Expand service areas
- Upgrade or maintain equipment
- Fund advertising campaigns
Before You Shop for a Loan
When it comes to financing your taxi business, it’s easy to be overwhelmed by the number of options available. So before you even look for a loan, take the time to determine:- Your ideal loan amount
- The maximum monthly payment you can afford
- The down payment you can afford
Prepare Documentation for The Loan Application Process
In most cases, during the loan application process, you’ll need to submit:- A business plan
- Personal and business tax returns
- Business bank statements
- A balance sheet
- Income statements
- Business licenses
- Personal and business credit reports
Select Your Business Financing Lender and Apply
1. Research your lender and loan options
Once you’ve determined your credit score, the ideal size and the cost of your loan, you can start shopping for lenders. As you browse, look for policies—such as minimum credit score or maximum loan amounts—that are non-starters. This will help you quickly weed out business financing options that aren’t viable. After you’ve collected several lender options, do some research on them. Read their reviews and look them up on the Better Business Bureau (BBB). Also, find out if they have experience with taxi business financing. The ideal lender is reputable with a great track record and experience in your industry.2. Choose a lender (or lenders) and apply
After compiling several lender options, it’s time to select one or more with which to apply. If you choose more than one, make sure you apply to all lenders around the same time. This will help minimize the impact on your credit score. Many lenders will have you fill out your taxi loan application online, though others may require an in-person visit. In either case, it’s a good idea to ask a few questions before you apply, such as:- Are there any restrictions on fund usage?
- How long does it take for the funds to be released to your taxi company?
- Is business loan prepayment allowed?
3. Evaluate lender offers and accept
Assuming your application is approved, you’ll receive a loan offer. This loan offer will contain all the details you need to determine the exact cost of the loan. Therefore, you should look over it carefully and make sure everything is in order. If you have any questions, ask your lender before accepting the offer. Then, once your questions are answered and you’re satisfied, you can sign and accept the offer. After that, you will receive your funds, usually via direct deposit.A Note on Obtaining a Taxi Loan with Bad Credit
If you don’t have good credit, obtaining traditional taxi business financing is going to be difficult. That said, there are alternative financing options, such as a merchant cash advance, that don’t require an excellent credit score. Also, taxi loans from online lenders are typically less stringent with their credit score requirements. Ideally, though, you should work on improving your credit score before you apply for a loan. That way, you’ll have an easier time getting approved and you can access the best interest rates. To improve your credit score, you should:- Pay your bills in full and on time.
- Keep your credit utilization ratio low.
- Dispute any errors or inaccuracies on your credit report.