Business & Limited Company Van Finance

Why fund a van through the business

A van bought outright takes cash out of the business on the day you need it most. Finance spreads that cost across the years the vehicle is earning — the van generates revenue from week one, so it should be paid for out of the revenue it generates rather than your reserves.

Choosing the structure

Hire purchase puts the van on the balance sheet as an asset from the start, usually allows the VAT to be reclaimed up front where the van is used for business, and transfers ownership with the final payment. Finance lease funds the depreciation rather than the full value, so payments are lower and VAT is typically spread across the rentals. Contract hire hands the disposal risk to the lender for a fixed monthly cost.

Funding more than one van

Growing a fleet does not have to mean a separate application each time. We can arrange a facility that lets you add vehicles as you win work. We recently sourced and funded seven vans for a Yorkshire installer — around £210,000 over 60 months on hire purchase, structured with the VAT deferred so it was not payable up front.

New companies and directors

A newly incorporated company has no filed accounts, and some lenders stop there. Others look at the directors’ track record, contracts in place and a director’s guarantee. Being new changes which lenders are appropriate, not whether the van is fundable.

See also: van finance generally, or finance lease vs hire purchase to choose a structure.