FINANCE OPTIONS - Commercial van finance

Commercial fleet finance

If your business needs to upgrade its vehicles, secure the finance to need to buy or lease a new fleet.

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What is vehicle finance?

Vehicle finance is a way for your business to purchase or hire new commercial vans or fleets, without putting your cashflow at risk.

It's a type of asset finance, specifically related to vehicles, which are a popular option for any business that doesn’t have the cashflow to purchase vans or fleets up front, as it allows them to spread the cost over a period of time with monthly repayments. 

Vehicle finance is a type of business loan secured against the asset, which means there is little risk for the lender, so interest rates are often lower than other types of business funding.

For businesses that have the opportunity to grow, but don’t have the working capital to take that step, vehicle finance can be a great solution. 

Vehicle finance can be easier to obtain than a bank loan

Start using new equipment before paying full cost

You can spread the costs for up to six years

What kind of vehicles can I finance?

Capitalise can help you find a lender to finance most types of commercial vehicles. Assets that hold their value like vehicles, machinery or equipment (known as hard assets) will be easier to finance than soft assets (like office equipment) as there is less risk associated. Below are some examples of hard assets:

  • Cars for commercial use
  • Vans and fleets
  • Heavy good vehicles and trailers 
  • Buses and coaches

What are the types of vehicle finance available?

Finance key assets to run and grow your business

The lenders we work with specialise in the following areas:

Finance lease

Also known as capital lease, is a way for a business to use an asset, without having to use their cash to buy it outright*. The business essentially rents the asset from the lender and at the end of the agreement they have the option to either: 

  • Sell the asset and be able to keep some of the sale income 
  • Enter a secondary rental period if they wish to continue using the asset
  • Return the asset to the lender.

*Important to note: the business will be responsible for the maintenance, upkeep and insurance costs of the vehicle.

Hire purchase

Hire purchase is a type of asset finance that allows a business to pay for a new asset in instalments. Effectively, the lender owns the asset, until the business finishes the payment on the agreed terms. Once the last instalment has been paid, the business will own the asset outright.* 

During the terms of the hire purchase agreement, the business cannot sell the asset as it will still technically be under the ownership of the lender.

* It’s important to remember that any upkeep of the asset will be the responsibility of the business, not the lender. A Purchase Option Fee can be required to transfer the ownership of the asset, however this is generally a very small amount (in some cases as little as £1). 

Operating lease

This type of business asset finance is very similar to finance leasing. The business rents the asset from the lender and does not own it. The difference between the two, is that with operation leasing, the business only rents it for part of the asset’s life. 
This can be a cheaper option as the rental cost is based only on a percentage of the asset’s original value. 


Refinancing is a way for a business to release cash from any assets already on the balance sheet. It can apply to assets the business owns outright, or already under a finance agreement. It is a useful option if a business is looking for a cash injection, or wanting to fund another piece of equipment. 

Contract hire

Contract hire is most commonly used for accessing new vehicles for your business. Payments are calculated based on the purchase value and estimated residual value of the vehicle at the end of the agreement. It's usually sold once the contract expires which helps to drive down the monthly repayments for the duration.

why use vehicle finance?

Get the resources your business needs without tying up your cashflow

Reduced costs and risks

Investing in new equipment using asset finance is an effective way to fund your purchases as well as reduce the risk that can come with ownership.

No delays

Capitalise has no hidden-costs and are hassle-free.  We're quicker than banks and can find a suitable match for you in minutes.

Industry expertise

Asset finance providers often specialise in a particular type of asset about which they have expert knowledge. Capitalise will help you find the most suitable lender for your industry and business.

Monthly payments

Asset finance allows you to spread the cost of purchasing equipment with fixed monthly payments and agreements extending up to 72 months.

Reduced tax

You can offset your monthly repayment to reduce your tax liability. The cost of renting or leasing an asset is deductible as a business expense, so this can reduce your overall tax bill.

What are the advantages and disadvantages of vehicle finance?

Here are the key advantages and disadvantages of vehicle finance you should be aware of: 


  • Good for cashflow as costs are spread over time
  • Generally cheaper than other types of business finance
  • Allows a business to free up cash 
  • Fixed interest rates
  • Lets your business grow with access to new assets
  • Maintenance costs can fall to the lender, depending on the type of finance
  • In some instances, VAT can be reclaimed - speak to your accountant to find out more


  • Failure to keep up with payments can result in the asset being repossessed
  • Depending what type of finance your business applies for, you could be responsible for maintenance costs 
  • The lender owns the asset until the last payment, so you won’t be able to sell it
  • The value of the asset could decrease over time
  • It’s more expensive than using the business’ own funds, as interest is included
  • You may need to pay a deposit upfront 

From telephones to trucks. Use a business asset to get funding.

More and more SMEs are using asset finance to invest in business growth. Asset finance is a form of business funding that can enable a business to purchase or refinance business equipment, spreading the cost over an agreed period of time. It is effectively a loan to buy or lease equipment, which can enable you to move your business forward.

Asset finance helps businesses finance exactly what they need and has considerable tax saving benefits. Capitalise has partnered with lenders who specialise in asset finance, making it easy for you to find lenders most likely to give you an offer.

At Capitalise, we work with specialist lenders who have a proven track record supporting similar businesses within your sector.

Who is vehicle finance for?

Sourcing finance can be a struggle for most businesses, especially in times of economic uncertainty. When traditional sources dry up, alternative solutions, such as asset finance, can offer a cost effective, and flexible method of purchasing business assets. Vehicle finance is a particularly well suited option for SMEs looking to invest in growth. Use Capitalise to find, compare and select lenders who specialise in asset finance.

Frequently asked questions about Asset Finance

It allows you to use your business capital to expand and make profit for your business. With leasing, you pay for your new business equipment in the same way as you pay your employees. This allows you to save your usable capital and makes budgeting for new purchases easier.

It is possible to join a new lease agreement with your existing lease and determine a new fixed end period. Otherwise your existing lease can be partly settled, providing a flexible way of upgrading without rolling forward debt.

Banks will often fund equipment and machinery; however, they typically provide only short-term and long-term funding - not medium term. Many companies choose to use asset funding to protect their working capital. Cash flow is crucial to every business, so it may be wise to leave headroom for other bank facilities in the future.

The cost of renting or leasing an asset is deductible as a business expense, so this can reduce your overall tax bill. If you expect to own the asset at the end of the lease or hire purchase period, this is considered a supply of goods for VAT purposes and you will have to pay VAT on the entire value at the start of the contract. If you will not become the owner of the asset at the end of the lease or hire purchase contract, this is a supply of services for VAT purposes, so VAT will be payable periodically.

You can claim capital allowances for assets bought through hire purchase as well as assets supplied through long-term lease. You can't claim capital allowances with shorter leases (i.e., less than five years and sometimes less than seven), but the leasing company can, so you should benefit indirectly through lower rental charges. Also, because it's a trading expense, you can usually deduct the full rental costs from your taxable income.

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