What is Business Van Finance?
IBusiness van finance allows you to acquire a vehicle, or fleet of vehicles, for your company without paying a large sum upfront. It’s an ideal solution for businesses that want to upgrade to the latest electric vehicles, taking advantage of the environmental and tax benefits while mitigating the expense of buying an EV. You’ll find financing on offer from general and specialist lenders, vehicle manufacturers and suppliers. You can use financing for new or used vans, or for buying at auction.
How does Business Van Finance Work?
Here’s a quick overview:
Term and Repayment:
Whether you opt for hire purchase, a lease, or take out a business loan to pay for your new van, you’ll be able to spread the cost with monthly repayments over a number of years. These payments are not affected by interest rises or inflation, and they include interest and VAT. There’s usually a penalty for early repayment.
Lender Requirements:
Lenders will carry out the usual credit and security checks and will ask you to show evidence of your business’s finances. This usually includes accounts and income statements over a certain period, as well as a balance sheet and cash flow forecast.
What are the different options for leasing my new business van?
Hire Purchase:
Here, the lender buys the van and you repay the cost with interest. Once all your monthly repayments are made, you can take ownership of the van, usually for a nominal fee.
Finance Lease:
With a finance lease, the lender also buys the van, but your monthly repayments buy you the right to keep and use it for the term of the lease. At the end of the term, you can choose to renew the lease, end it and return the van, or sell the van and keep a percentage of the proceeds.
Contract Lease:
This is a popular option that allows you to hire a brand-new van, usually for a period of two to five years. When the lease ends, you simply return the van to the lender.
Business Loan:
A secured or unsecured business loan can raise the capital to buy your new van. Secured loans require collateral, but typically have lower interest, a higher threshold and a longer payment term. Unsecured loans may require a personal guarantee.
Can I refinance my existing van to release equity?
Yes! Refinancing a van is a simple way to get a quick cash injection for your business. In this case, you effectively sell the vehicle to the lender, who leases it back to you. If you can’t make the repayments, the lender may repossess the vehicle to recoup the balance.
Many lenders will allow you to refinance vehicles you haven’t fully paid off yet. The amount of the loan will depend on how much of the cost you have repaid.
Business Van Finance
Fund new or used vans with flexible finance designed around your business needs.
Spread the cost over manageable monthly payments while keeping your cash flow protected and your operations moving.