The taxi and limousine services industry contributes $33 billion to the U.S. economy. With more than 1.3 million businesses in this sector, it can be difficult to make your mark, though.
Whether you’re looking to ramp up your efforts or manage through slower months, taxi or limo financing can help.
Financing Your Limo or Taxi Business for Success
Running a business isn’t always a smooth ride. Here are a few reasons you might need a taxi or limo business loan.
Buying New Vehicles
Purchasing a new vehicle is expensive, so if you’re planning to add a few proverbial ships to your fleet, a limo business loan can help you afford these new additions. That’s the case whether you’re looking to buy a stretch limo, luxury sedan, party bus, shuttle van or antique Rolls Royce.
Weathering the Seasons
If your limo business is located in a region that experiences the 4 seasons, spring and summer could be great, when weddings and outdoor events are more frequent. However, when fall and winter come into view, cash-flow shortages could make it difficult to get by.
Marketing Your Limousine Services
During the slow months, you might want to increase your advertising spend to market your services for year-round needs, including airport transportation, corporate event travel, sporting events or a night out, to name a few.
When you don’t have enough capital on hand but want to invest in your business, consider a loan for your taxi business or limo service.
Hiring Additional Staff
A jump in business could lead you to need more drivers or onsite mechanics, and you don’t want to hire just anyone. Particularly when it comes to chauffeurs, ensuring you hire quality drivers with safety training and impeccable driving records could require paying an above-average wage.
Taxi or limo financing can help your business continue to operate smoothly while you put new staff in place.
Best Loans for a Taxi Business or Limo Service
Below are a few limo financing options to consider when you’re in search of funding.
Use an equipment loan to buy the vehicles you need to operate your business. Often with these loan types, the equipment serves as collateral for your loan. As such, lenders may provide borrowers with up to 100% of the item’s value.
Business Line of Credit
In the transportation industry as in other sectors, you have your ups and downs. A business line of credit is there when you need it.
Use it to cover an emergency repair or finance a large one-time purchase. Similar to a credit card, once you’re approved for a certain amount, you can access up to that amount at any time, though you aren’t required to. As you pay back what you borrowed, your credit line is restored up to the original amount.
Business Term Loan
If you’re in need of funds for a 1-time purchase, a term loan could be a solution for your needs. Depending on the lender, loans may be short-term, payable in months, or long-term, with payment terms extending to years. Loans are repaid in regular installments, which could be daily, weekly or monthly depending on the terms for which you’re approved.
The Small Business Administration (SBA) works with partner lenders to make long-term loans and lines of credit affordable and available to many entrepreneurs. The government agency guarantees a portion of all SBA loans, which means these loans are less risky for lenders.
Merchant Cash Advance
A merchant cash advance is an alternative financing product that provides fast funding to business owners who may have been turned down for conventional loans. It’s designed to provide funds for short-term needs and meant to be paid quickly, often with fixed daily or weekly payments.