My Business Bought A Car!

I did a thing!

I purchased a car in my LLC’s name. Yep, I sure did. Isn’t she lovely? Her name is Serena (as in Serena Williams, the G.O.A.T.) She is a Volvo XC90 T6 Inscription. I know what you are thinking. A Volvo Quisha, really? I know..I know… I said the same thing but if you go test drive one, you will probably fall in love too.

Oh, and don’t mind the Benz beside me, that’s Denzel, my hubby’s car. We brought them both home at the same time. Don’t you just love the names? #blackexcellence

So, here’s the back story behind the purchase of my car. I celebrated the 3^rd anniversary of my DBA filing by buying a car in my busines name. And let me tell you, social media influencers will make you think that purchasing a vehicle in your business name is as easy as snapping your fingers.

I’m not saying it’s impossible, I’m just saying the process is more involved than how it is portrayed. There is definitely some measure of stress and patience needed so I thought I would share my journey with you.

Buying a car in your business name..

1. Establishing business credit can take up to two years so start early.

Obtain your Tax ID number or EIN
Create a Duns & Bradshaw business credit profile. D&B is the major credit bureau for business financial statements.
Build your business credit! I built business credit for 9 months before purchasing my car. I did three things to establish business credit. First, I took out a 5k loan through Quickbooks Capital loan and paid it back on time every month. Then I got approved for an 8K American Express business credit card through Amazon and make sure to pay on it consistently each month. I also keep my balances low. Last, I switched our cell phone carrier from AT&T to T-Mobile who offers small business cellular plans for a lot cheaper than AT&T's regular cellular plans.

2. Make money! (Consistently)

When influencers are telling you how easy it is to purchase a car in your business’s name, they usually leave out the part about having to make enough money to justify the expense. But this step is equally as important as the first. Now, I’m no expert and I can’t tell you how much money you need to be making to justify the vehicle purchase. There are too many factors involved like the cost of the vehicle, the interest rate and other loan details. What I can say is at the time of the blog post, my business has grossed $180k over the past 9 months so that’s a consistent average of about $20k per month which was sufficient for a vehicle about 35k more than the one I purchased.

3. Shop around (for banks that offers commercial auto loans and for the lowest interest rates)

Depending on the dealership that you go to, you may not get the best interest rates offered to you. I purchased a certified pre-owned vehicle and interest rates on used cars tend to be higher, therefore I definitely had to shop around. I was NOT going to go with the rates that the dealer was offering, so I left with a copy of the Bill of Sales and approval and the real work started.

I had no idea that it was so hard to find a bank that offered commercial auto loans. I got approved at several banks for a privately owned vehicle loan but our banks (Chase, Wells Fargo, and USAA) as well the Credit Unions in my area don’t offer loans for commercial auto purchase. I thought it was a lost cause. In my research, I found it easier to find banks that offer commercial auto loans on fleets of vehicles or for the trucking industry easier than it was to find a bank that offered a commercial loan for a small business. But... that was before I called Bank of America (as a last resort). Now, BOA and I don’t have the best relationship (a story for another day) and I was seriously considering closing out that account but wouldn’t you know they actually offer a Business Advantage Auto Loan.

4. Apply and submit required documentation

Applying for the commercial auto loan with BOA was done easily online. I got approval almost instantly. Although the following steps took place over several days, I’m going to list them for brevity.

I uploaded the Bill of Sale from the dealer (remember to have the dealership remove Gap insurance as they do not finance Gap and this can cause a 1-2 day delay in the process).
They emailed me a Letter of Resolution that I had to sign and send back. This letter basically stated that my business was the official purchaser of the vehicle and borrower of the loan.
They went back and forth with the dealership doing behind the scenes stuff and in about 6 days, they told me (and my husband) to come pick up our cars. (By the way, he also used BOA for his auto loan but his transaction was totally separate from mine).

My overall thoughts about the experience…

Once I realized that I wasn’t going to walk off the lot with a car in one day (because I was not about to pay a 8-10% interest rate after working so hard to on my credit), I knew that patience was going to be a virtue.
I had a great salesman that was just as patient as I was and this helped tremendously because he was always available by phone or text.
BOA was extremely easy to deal with. Applying was easy, uploading documents was easy and every time I had a question and called, the question was answered quickly.
Although I hesitated to purchase a vehicle now because rates are not where they used to be, my CPA advised me to go ahead and do it. (One, to save on my tax liability and two, because interest rates will most likely hike in the months to come. I guess we shall see).

In the meantime....if you see me rolling, be sure to wave and say HI!

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Quisha Umemba is a Registered Nurse with a Public Health background. She is a qualified consultant, educator, speaker, trainer, facilitator, and coach with over 20 years in the healthcare/public health fields. With a passion for activating others, Quisha helps public health leaders, helping professionals, and emerging entrepreneurs monetize their skillset to level up their career or start a service-based business. Find out more by visiting https://quishaumemba.com/