Business Finance

Every business is different when it comes to finance, which is why we have a number of options for the financing of your vehicles.

Our Business Centre team is here to ensure you will be given the opportunity to choose the best option to suit your business needs.

Business Finance Lease

Business Finance Lease is a straightforward rental agreement that offers significant tax advantages, particularly if your business is VAT registered. Business Finance Lease is designed to make budgeting easier for your business.

With a 'Balloon’ style Finance Lease you can reduce your monthly rentals even further because the vehicles estimated resale value is taken into account when the rental payments are calculated. The estimated value is then offset to the end of the agreement, thereby reducing your rental payments. At the end of your lease agreement, you must sell the car to an unconnected third party.

With a Finance Lease your sales proceeds will first need to cover your outstanding 'balloon' payment and any balance will then be refunded to you. Any shortfall remaining from the 'balloon', however, will be your responsibility to settle.

Like Business Contract Hire for VAT registered businesses*, VAT is reclaimable on fleet car rentals, based on 50% of the VAT on the capital element (assuming an element of private use) and 100% of the VAT for any maintenance charges. For light commercial vehicles, VAT is reclaimable on 100% of capital and maintenance charges.

Routine servicing and maintenance costs can be included for a small increase to the monthly rentals. Maintenance** packages include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear.

It is important to stress that whilst you may benefit from the sale of your vehicle you could also be required to cover the potential shortfall. Finance Lease does not offer complete peace of mind and customers looking for no vehicle disposal issues would be better suited to Business Contract Hire.

Business Contract Hire

If your business normally buys cars with cash, a bank loan, or through a traditional Hire Purchase scheme, you may find Contract Hire a far more cost-effective option.

Under current VAT legislation, a VAT registered business* will be able to reclaim the VAT on your business's New or 'VAT qualifying' used vehicle (less than 3 months old). This saving is then passed on to your business in the form of lower monthly rentals, fixed throughout the agreement. Not only does Contract Hire allow your business to run a new vehicle for an inclusive monthly rental but it also releases valuable capital back into your business.

Routine servicing and maintenance costs can be included for a small increase to the monthly rentals. Maintenance** packages include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear.

At the end of the agreement the vehicle is collected thereby avoiding time-consuming disposal and any worries over depreciation of the vehicle*. Annual Road Fund Licence is included in the monthly rental for the duration of the hire contract.

For VAT registered businesses*, VAT is reclaimable on fleet car rentals, based on 50% of the VAT on the capital element (assuming an element of private use) and 100% of the VAT for any maintenance charges. For light commercial vehicles, VAT is reclaimable on 100% of capital and maintenance charges. ** Terms and conditions apply.

Business Contract Purchase

Business Contract Purchase is a highly flexible and affordable way of driving your new vehicle.

You pay an initial deposit, followed by a series of fixed monthly payments over an agreed period between 12 and 60 months. Your payments may be significantly lower than anticipated because the predicted value of your new vehicle at the end of the agreed period is taken into consideration.

Business Contract Purchase can ease cash flow and free up valuable capital that can be used more effectively elsewhere within the business. This option provides your business with a number of benefits. The vehicle appears as an asset in the accounts and a proportion of its value can be written down against profits. Interest payments are allowable against tax, and taking up the maintenance option will save you administration time and avoid unexpected bills.

Business Contract Purchase gives you flexibility at the end of your agreed contract period. Your company has the option to own the vehicle but with the security of a guaranteed future value should the vehicle be worth less than the anticipated value.

This means you have 3 options at the end of your agreement:

• OPTION 1
  Make the payment and keep the vehicle.
  

• OPTION 2
  Extend the agreement by spreading the final payment over a further period.
  

• OPTION 3
  Return the vehicle without making the final payment*. This releases you from further obligation except for excess mileage and vehicle damage charges should the estimated mileage agreement be exceeded or any damage be considered greater than fair wear and tear.

*Excess mileage and vehicle damage charges other than fair wear and tear may be payable.