What are the best ways for financing vehicles for my business?
If you require vehicles for your company, the number one question on your mind will be what is the best way to pay for them? Whether you go down the route of contract hire, leasing, or purchasing outright, it’s important to look into what company car funding method works best for you and your operation.
Instead of scratching your head and not knowing what path to take, have a look below at some of the best ways to finance cars for your company.
Use your company’s cash
Arguably the easiest and quickest way of financing business vehicles is by paying for it from your bank account. However, this all depends on how much cash you’ve got sitting around doing nothing. For many businesses and startups, you may not have the funds available. If you have the cash, it may be a no-brainer to use it. However, you could be putting all your savings into the vehicles, which could be better spent on other things.
Finance through a lease
Leasing is a popular way of financing business vehicles thanks to its simple process that does not require a ton of capital upfront. A lease is a good way to ensure your business has reliable, modern, and clean vehicles at all times. If you’re a large enterprise business looking to lease lots of vehicles, take a look at Total Motion. They are specialists who can manage your fleet of business cars or vans and handle all the paperwork that comes with it.
Get a bank loan
A bank loan is a great way to finance a capital asset. If you’ve got a good relationship with your bank, obtaining a loan should be quick and run smoothly. But, it’s true that certain banks are not exactly known for their fleet-footed approach to lending. To obtain the loan you want, you may need to produce a business plan or forecast.
Using hire purchase
HP (hire purchase) works in a similar vein to leasing. But, the major benefit is you will own the vehicle once the contract comes to a close. There are finance products like finance leases or contract purchases that do a similar job. Hire purchase shares similar benefits to a lease because you’re able to access brand-new vehicles but pay as you go. However, you will have to pay more each month to own the asset at the end of the contract.
Borrow from friends and family
For those who have loved ones that have spare cash, it’s certainly tempting to lean on friends and family to help fund your business vehicles. Although, entering a loan agreement with people close to you can turn sour very quickly! If you’re unable to keep up with the payment instalments you agreed on, this can wreck relationships.
As shown above, there are advantages and disadvantages associated with each financing option. The way you finance vehicles for your business will all fall down to personal circumstances and the way you view money.
