Can I Get a Van on Finance Through My Business?

Your questions on van finance answered

As a business owner, you may have already come across the need for a van to support your daily operations. Whether you’re a courier service, a tradesperson, or a retail business, having access to a reliable van can make a significant difference in your productivity and success. One of the most common questions we encounter at First Oak Capital is, “Can I get a van on finance through my business?” The answer is a resounding yes! In this blog, we will delve into the world of business van finance and explore the best options available to UK companies.

Understanding Business Van Finance

When it comes to acquiring a van for your business, there are various financing options at your disposal. Business van finance is a term that covers several methods of acquiring a van without paying the full purchase price upfront. Some popular business van finance options include hire purchase (HP), finance lease, and contract hire. Each of these options has its own set of benefits and drawbacks, making it essential to understand the distinctions and choose the one that best suits your business’s needs.

Hire Purchase (HP)

Hire purchase is a straightforward financing option where you pay an initial deposit followed by fixed monthly instalments over an agreed period, typically between 2 and 5 years. Once all the payments have been made, the van becomes your property. This option is perfect for businesses that want to own the van outright at the end of the agreement, without any mileage restrictions or concerns about wear and tear.

Benefits of Hire Purchase:

• The van is owned by your business after the final payment.
• Fixed monthly payments make budgeting more manageable.
• No mileage restrictions or wear and tear charges.

Drawbacks of Hire Purchase:

• Higher monthly payments compared to other financing options.
• The van is not considered an asset until the agreement is completed.

Finance Lease

A finance lease is a long-term rental agreement where your business pays a fixed monthly fee to use the van for a set period, usually between 2 and 5 years. At the end of the agreement, you have the option to sell the van to a third party and keep a percentage of the sale proceeds (called the “balloon payment”), or you can continue leasing the van for a reduced “peppercorn” rental.

Benefits of Finance Lease:

• Lower monthly payments compared to hire purchase.
• The lease is generally tax-deductible, reducing your taxable profit.
• No mileage restrictions or wear and tear charges.

Drawbacks of Finance Lease:

• Your business never owns the van outright.
• You are responsible for the van’s disposal at the end of the agreement.

Contract Hire

Contract hire is another long-term rental option where you pay a fixed monthly fee to use the van for a specified period and agreed mileage. At the end of the contract, you simply return the van to the leasing company. This option is ideal for businesses that want a hassle-free solution without worrying about vehicle ownership or disposal.

Benefits of Contract Hire:

• Low initial deposit and fixed monthly payments.
• Maintenance, repairs, and breakdown cover can be included in the agreement.
• No need to worry about vehicle depreciation or disposal.

Drawbacks of Contract Hire:

• Mileage restrictions and potential excess mileage charges.
• Your business never owns the van.
• Charges may apply for excessive wear and tear.

Choosing the Right Finance Option for Your Business

When deciding on the best business van finance option, it’s crucial to consider your company’s unique needs and financial situation. Here are some questions to ask yourself:

• Do you want to own the van outright at the end of the agreement?
• How important is cash flow for your business?
• What is your annual mileage?
• What is your annual mileage and potential wear and tear on the van?
• Are you looking for a more hands-off approach to vehicle management?

By answering these questions, you can narrow down the financing options that best align with your business goals.

 

Understanding the Eligibility Criteria for Business Van Finance

To qualify for business van finance, there are certain criteria that you need to meet. Lenders will typically consider factors such as:

• Your business’s credit history and financial standing.
• The length of time your business has been operating.
• Your business’s ability to make the agreed monthly payments.
• The type and value of the van you wish to finance.

Having a strong credit history and demonstrating a stable financial track record will increase your chances of securing a favourable business van finance deal. However, if your business has a less-than-perfect credit history, don’t despair. At First Oak Capital, we have access to a wide range of lenders who specialize in providing finance solutions for businesses with varying credit profiles.

How First Oak Capital Can Help You Secure the Best Business Van Finance

As finance brokers with extensive experience in the UK market, First Oak Capital is well-equipped to help you find the most competitive business van finance options. We understand that every business is unique, which is why we take the time to assess your individual requirements and tailor our recommendations accordingly.

By working with a diverse panel of lenders, we can present you with a variety of finance solutions that cater to your business’s needs. Our team of experts will guide you through the entire process, providing you with impartial advice and ensuring you understand the terms and conditions of your chosen finance agreement.

Conclusion

Getting a van on finance through your business is not only possible but also a smart decision for many companies. With a range of financing options available, including hire purchase, finance lease, and contract hire, there is a solution to suit every business’s needs. By considering your company’s specific requirements and working with a trusted finance broker like First Oak Capital, you can secure the best possible finance deal for your business van.