If you're a business owner, obtaining all the necessary vehicles to operate can be a significant investment; fortunately, we have various vehicle financing options available to businesses. Here at Vanbase, we understand that by having access to more vehicles, your company will be able to do more business and increase its profits, so investing in one or more additional vehicles can pay dividends.
We also understand that navigating the world of vehicle financing can be confusing, and choosing the right option can be challenging, so we've answered the questions we're most frequently asked.
What are the benefits of vehicle financing for businesses?
Vehicle financing allows businesses to acquire the vehicles needed to operate without having to pay the full purchase price upfront. This can help businesses conserve their cash flow and invest in other areas of their operations.
Find out more about our Van Finance options.
What kinds of business finance are available?
We have a range of different business finance options, including Hire Purchase (HP), Personal Contract Purchase (PCP) and leasing.
A Hire Purchase agreement allows you to purchase a vehicle with regular repayments over a 1-5 year period, depending on your business needs. There are no restrictions on the number of miles you can drive with a vehicle purchased via Hire Purchase, and no large payment at the end of the term. You have access to the van straight away and your repayments will stay the same over the period.
There are some things to be aware of when buying through a Hire Purchase model: the van isn't officially yours until you've made the final payment and if you miss payments before paying a third of the total amount payable, the lender can repossess the car without a court order.Learn more >
Buying a van through Personal Contract Purchase works similarly to HP in that you make regular repayments over a predetermined period, however, unlike HP, PCP has lower monthly repayments. This is because, at the end of the term, the buyer has the option to either return the van, use the resale value towards a new van, or pay off the final value (known as a balloon payment).
Factors to consider when procuring a vehicle through PCP include the restriction on the number of miles and the balloon payment at the end of the term which is often several thousand pounds.Learn more >
A Lease Purchase agreement allows you to buy a vehicle with a 0-50% deposit and make low monthly repayments, with a final balloon payment. If you're unable to make the balloon payment, you can extend the Lease Purchase agreement by making additional monthly payments or refinancing the vehicle to cover the final payment.
It isn't guaranteed that you'll be able to secure another financial agreement to cover the final payment, so you need to be sure you can make the final payment before taking out the agreement. By the time the balloon payment needs to be paid, it may be higher than the residual value of the vehicle.Learn more >
What are the deposit amounts?
Your deposit can be as high or as low as you like. The higher your deposit, the less you'll need to borrow so your monthly repayments will be lower, but we understand that it's not always possible to put down a big deposit. You can even have a £0 deposit and drive your new business vehicle(s) away the same day.
I'm part of a new business; how long do we need to have been trading to get a finance agreement?
New businesses can apply for finance for Vanbase. In the first few years, whilst there are no accounts submitted to companies house, a Directors Personal Guarantee is normally required. Acceptance is typically down to the strength of the Director and also the loan amount.
Do I need a Director's Personal Guarantee?
A director's personal guarantee (DPG) is a signed document that means a business director will take personal liability for the vehicle(s) in the event that the business can no longer make the necessary repayments. Depending on submissions to Companies House as well as the financial strength of the company, a DPG may be required.
Can I make overpayments/settle early?
Yes - in the majority of cases, we accept overpayments and early settlements on Hire Purchase agreements with no extra charges or penalties.
What documents do I need to apply for business finance with Carbase?
No documentation is needed when you apply. Later in the process, company information is required, such as the company's registered address, registration number, VAT number and director details.
What should businesses consider when choosing vehicle financing?
Businesses should consider several factors when deciding which vehicle financing option to take, including the cost of the vehicle(s), the interest rate, the repayment terms, as well as the overall financial health of the business.
What happens if a business is unable to make vehicle financing payments?
If a business is unable to make vehicle financing payments, we may repossess the vehicle or take other legal action to recover the funds owed. This can negatively impact the business' credit and ability to obtain financing in the future. If you are having trouble making repayments, you should speak to the lender as early as possible as they will be able to assist and advise.
Can businesses get financing for used vehicles?
Yes, businesses can obtain financing for used vehicles. However, the interest rates and repayment terms may be different than for new vehicles. The specific financing options for used vehicles may vary depending on the lender and the age and condition of the vehicle.
Can businesses deduct vehicle financing expenses from their taxes?
You may be able to deduct the interest and depreciation expenses associated with vehicle financing on your business taxes. It's important to consult with a tax professional to understand the specific tax implications of any finance agreement for your business.
How can I get vehicle finance for my business with Vanbase?
For more information on van financing with Vanbase, and to try out our finance calculator, head to the Vanbase Finance Page.
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