Ever thought about starting a limousine business but hesitate because the road to success just seem a little too complicated?
What if we tell you that it may not be as difficult as you think.
These days, most lenders aren’t interested in lending money to a startup providing limousine services. The lenders consider such businesses a high risk business and generally believe that their investment dollars can be better spent elsewhere. That said, there are a few lenders out there that feel confident in the transportation industry and will lend accordingly. Their background might be exclusive to the transportation industry and will cover not only limousines but shuttle buses, coach and tour buses, ambulances etc.
Your Background and Work Experience
Most lenders review the applicant’s background and work experience. They will also try to ascertain that if your startup business may lose money in the beginning. They would like to know if your business is going to have some upfront money once the lender is done with the initial credit review and your qualifications.
Vehicle’s Year, Make, and Model
The other thing you would have to talk about is the year, make and model of your vehicle, including the mileage. Many lenders prefer lending at least $25,000 to $30,000 and would like a limousine no older than maybe three to four years old. In addition, their leases could run as little as 30 months and as much as 60 months.
Lastly, make sure you get an interest rate. I have seen businesses charged anywhere between 14%- 38% interest per year once you get through all the red tape. You would need to have a business plan prepared by you or a qualified individual to see what all the variables are but if you understand your market, you should be fine (but don’t take our word for it).
The last thing to remember is that you will wind up personally guaranteeing the lease and a personal financial statement by the lender might be required and a couple of years of personal income tax returns.
Before you go, remember that each lenders’ requirements might be different and happy hunting!