Can I Get Van Finance with a Fair Credit Score?

If you’re a business owner or a tradesperson in the UK, chances are you rely on a van for your day-to-day operations. Your van is essential for transporting goods, tools or even people to and from various locations. When it comes to financing your business van, your credit score might be a cause for concern. You might be wondering, “Can I get van finance with a fair credit score?”

In this blog post, we’ll demystify the process of securing van finance with a fair credit score and discuss how First Oak Capital can help UK companies with fair or poor credit history obtain business van finance. So, buckle up and let’s dive in!

The Role of Credit Scores in Van Finance

Credit scores play a significant role in determining your eligibility for a loan. In the UK, credit scores are calculated by credit reference agencies, like Experian and Equifax, who assess your financial history and credit behaviour. A good credit score indicates that you’re a responsible borrower, while a lower score might raise concerns about your ability to repay the loan.

However, it’s essential to remember that credit scores aren’t the only factor lenders consider. Other factors, such as your income, business financials, and affordability, also play a part in the decision-making process. Having a fair credit score shouldn’t discourage you from applying for van finance, as many lenders, including First Oak Capital, are willing to work with individuals and businesses with a range of credit profiles.

Understanding Fair Credit Scores and Van Finance Options

A fair credit score typically falls between the range of 561-720 (Experian) or 380-419 (Equifax), depending on the credit reference agency. Although your options might be more limited than someone with an excellent credit score, there are still several avenues available to secure van finance with the help of First Oak Capital:

1. Specialist Lenders: First Oak Capital has access to a network of specialist lenders who provide loans to individuals and businesses with fair or poor credit scores. These specialist lenders often have more flexible eligibility criteria and are more understanding of your situation. Although they might charge higher interest rates to offset the increased risk associated with lending to borrowers with fair credit scores, First Oak Capital will work tirelessly to find the most competitive rates available for your business.
2. Hire Purchase (HP) Agreements: HP agreements are a popular form of van finance. They allow you to spread the cost of the van over a fixed period, typically between 2-5 years. At the end of the agreement, you have the option to purchase the van by making a final payment, known as a balloon payment. HP agreements are relatively easy to secure, even with a fair credit score, as the lender retains ownership of the vehicle until the loan is fully repaid. First Oak Capital can help you find an HP agreement that suits your needs and financial situation.
3. Leasing: Business leasing, also known as contract hire, is another option for financing a van. With leasing, you agree to rent the van for a fixed period, usually between 2-5 years, and make monthly payments during the contract term. At the end of the lease, you return the van to the leasing company. Leasing can be a viable option for businesses with a fair credit score, as the risk for the lender is often lower compared to other financing options. First Oak Capital can assist you in finding the best leasing deals available to match your requirements.

For more information on business van finance with bad credit click here.