Grow More Than Your Fleet With a Personal Guaranty

Grow More Than Your Fleet With a Personal Guaranty

Say you own a new construction business and a lucrative opportunity comes your way. You win the bid and determine that to do the job you’ll need to add two trucks to your fleet.

Your next step is to figure out how to finance those trucks. What are your options?

For many new businesses, access to capital is limited. Traditional lenders often hesitate to extend credit to businesses without a proven track record, and when they do, it can put the business owner at a competitive disadvantage.

Yet you believe in your business. You put everything into making it go. If only there were a commercial auto financing option that could meet you where you are.

Tim Vella, AVP of Southeast Regional Fleet for GM Financial, says that a personal guaranty may be exactly what new business owners need. “It’s great for new businesses because it helps them acquire the vehicles they need to grow and grows their business credit at the same time,” he says.

Here are three reasons a personal guaranty may work for you:

1. It puts your personal credit to work.
   A personal guaranty allows you to finance your business vehicles using your personal credit. Think of it as your personal credit “standing in” for your new business’s lack of established credit.
   
   GM Financial’s Personal Guaranty offers both commercial lease and APR financing options, so you can choose what fits your needs. And if your personal credit is strong, you can get optimal loan terms for your fleet.
2. Keep personal credit separate from business credit.
   A personal guaranty also allows you to keep your personal credit separate from your business credit. “Many lenders will finance vehicles for a new business,” Tim continues, “but they will often ask you to sign on as a co-buyer.”
   
   In a “co-buyer” scenario, that $50,000 truck will look like a personal loan on your credit, and that can hamstring your finances.
   
   “It’s hard to grow your business and put your personal credit at risk. With a personal guaranty, you can keep them separate. Your name isn’t on the contract or title; your business’s vehicles are financed under your company name,” Tim says.
3. You can grow your business credit at the same time.
   As a new business, building a credit history is vital because it puts you in a strong position to take advantage of future opportunities. (And don’t forget about the potential tax benefits.) Financing your vehicles under your company name means that each timely payment makes your business more creditworthy.
   
   “If you’re not growing, you’re shrinking,” Tim says. A personal guaranty is a commercial auto financing tool built for any business, or business owner, that wants to be ready for the next opportunity. It helps you finance the vehicles you need today and build the business credit profile that will take you into tomorrow.

Whether you’re considering your next opportunity or have questions about anything related to commercial vehicles, GM Financial is here to help. Reach out to us anytime. We’d love to talk.

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