Also some lease companies are better than others on the admin front so check out reviews too. There are a lot of companies out there that will offer lease options and dealers will also have their own products so in a competitive market, make sure you shop around.īe aware also that just like bank loans, there may be hoops to jump through, especially if you are a new company. The big downside is that you won’t own anything at the end of the lease, so if you have looked after a vehicle for 3 to 5 years you’ll just be handing it back to the finance company. Leasing is one of the most popular ways of financing a new vehicle because it is a simple process that doesn’t require a lot of upfront capital.Ī lease is a great way to make sure your company has modern, reliable and clean vehicles at all times and you can even add in extra costs like signwriting or boarding and shelving for a van. You may have to produce a forecast or business plan for bigger loans and company owners may be required to agree to directors’ guarantees.

If you have a good relationship with your bank then you may find that this is a very quick and painless process and having the cash to hand gives you bargaining power with the dealership.īut it is also true to say that some banks aren’t exactly known for their fleet-footed approach to lending and if you are a non-standard case then expect to have to jump through a few hoops. Getting a bank loanĪ bank loan is a good way to finance a capital asset and with interest rates still being at a very low ebb, it is also very cheap. So whilst paying cash for a vehicle might seem like a good idea, it could end up costing you more in the long-run. They would be an example of different ways you could use the money to better effect. So maybe you have £30,000 that you could spend on marketing that would bring in £120,000 of profit, or a new machine that would save you £60,000 of costs. £3,000 is your opportunity cost.īut for business owners, opportunity cost means something much more fundamental in that it is what your business could be using it for. Suppose those shares make you 10% in dividends and growth. So in the case of a car, you may choose to use £30,000 to buy a vehicle, or you could invest it in shares. If you haven’t come across the term before, it simply means what you forego as a result of taking a particular course of action. If you have got the cash, then it is quick, easy and you could end up negotiating a better deal for a quick sale.īut there’s a reason why you may not want to do this and that is called an ‘opportunity cost’. Now, this presupposes that you have actually got enough cash sitting around doing nothing, which obviously isn’t the case for most businesses and startups. This is probably the quickest and easiest method of financing a business vehicle and it simply paying for it from your bank account.

Naturally, if there’s something we don’t cover, then you can call us and we’ll be happy to talk you through the issues.

But this guide should give you a general idea of the things to think about . Now we have to add the traditional accountants’ health warning here – there are lots of things that could be different about your personal situation and we can’t possibly cover everything.Īnd we’re not going to be covering tax, because that’s equally as complicated if not more so. This is a question that keeps many of our clients up at night so in this post, we’re going to look at the subject. If you need a vehicle for your business then what is the best way to pay for it?

Barclays small car loan calc