Finance your fleet with business vehicle leasing
Leasing commercial vehicles enables your business to access high-quality cars, trucks, and other vehicles at a lower upfront cost. Rather than investing in long-term ownership, you can simply return the vehicle at the end of a leasing agreement and seek out a brand new car for your next lease.
When considering whether a business car lease deal is suitable for your business, it’s essential to weigh up the different financing options available to you.
What are the benefits of commercial vehicle leasing?
The benefits of commercial vehicle leasing include:
Simplified vehicle expenses
Leasing a commercial vehicle can simplify your vehicle expenses. Rather than budgeting for long-term ownership and maintenance of a commercial vehicle fleet, you can instead budget according to the fixed duration of the lease term.
Lower-cost asset acquisition
Acquiring physical assets like commercial vehicles can place a hefty toll on your finances. Commercial vehicle leasing often imposes lower monthly payments compared to purchasing a vehicle outright or having to make a monthly car loan payment.
Tax advantages
Depending on where your business operates, you may be eligible for a variety of tax benefits that can help lower your monthly and annual costs. In the UK, for instance, some payments may be tax deductible and if you are VAT registered you can reclaim a portion of the VAT paid on car lease payments.
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What types of finance can I use to gain a commercial vehicle lease?
Asset finance
Asset finance is a specific type of business lending designed to help companies like yours access assets such as commercial vehicles and other physical equipment or technology. Please note that asset finance typically requires an upfront deposit and there is less flexibility with early repayments.
Operating lease
An operating lease (also called a business contract hire BCH) allows your business to rent an asset for a fraction of the asset’s life cycle. Operating leases are often the most common type of asset finance used for commercial vehicle leasing, offering a set monthly rental period and fixed payment amount. At the end of an operating lease, the leasing company expects the return of the asset.
Finance lease
A finance lease (also called a capital lease) allows your business to lease a car for a set period. In a finance leasing agreement, your business selects the asset and the leasing company purchases it and lends it to you at a set monthly cost. At the end of the leasing agreement, you can either dispose of the vehicle through an asset disposal process or pay the remaining value of the asset to establish permanent ownership.
Hire purchase
A hire purchase is a type of credit agreement in which you agree to a fixed monthly payment in exchange for access to an asset, such as a commercial vehicle. In a hire purchase agreement, there is a set number of instalment payments that must be made rather than a set leasing period. Once the final payment instalment is made, you legally own the vehicle.
How much can you afford to borrow?
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
What is commercial vehicle leasing?
Rent a vehicle for business use
Commercial vehicle leasing is the process of renting a vehicle solely for business use. Unlike personal vehicles, commercial vehicles are managed and maintained by your business. When building a fleet of commercial vehicles, you can choose between either buying or leasing the vehicles.
With less upfront capital
Leasing a commercial vehicle enables you to access newer vehicles without the upfront cost. With a commercial vehicle lease, you agree to pay a set monthly amount in exchange for a set period of use, typically ranging between two to five years. At the end of this period, you return the vehicle to the leasing company and can choose to lease a new vehicle if needed.
Additional terms
There are often additional terms in a commercial leasing agreement, including mileage restrictions or limitations, maintenance requirements, and vehicle condition requirements upon return.
What can I use a commercial vehicle lease for?
Trucks
You could use a commercial vehicle lease to gain access to essential trucks and vans for your business.
Cars
Whether you’re seeking a Range Rover lease, or looking to lease a smaller vehicle, a commercial lease could help.
Fleet
A commercial vehicle lease can also be used to gain access to more than one car, motorbike, or truck.
Find out more about commercial vehicle leasing
Who is eligible for commercial vehicle lease financing?
Asset financing for a commercial vehicle lease can be a viable option for all types of businesses, including small businesses and startups. When seeking out asset financing for a commercial vehicle lease, key factors lenders look at can include:
Borrowing and credit history
Available working capital and liquidity
Assets owned by your limited company that can be used to secure a loan
Business bank statements from within the last 90 days
Even if your business has bad credit or a limited borrowing history, you can still qualify for unsecured loans. However, it is important to note that unsecured loans often include more stringent requirements, as well as higher monthly repayments and interest rates than a standard business car leasing contract.
What are the risks of commercial vehicle leasing?
Mileage restrictions: Most leasing companies impose mileage restrictions on commercial vehicles, as these vehicles can lose value as they climb higher in total mileage. If your business team travels frequently, these restrictions may limit your use of a leased commercial vehicle.
Maintenance costs: Though you do not have ownership of a leased commercial vehicle, you still hold the responsibility for vehicle maintenance, repairs, and insurance. Factoring in these costs is essential for proper budgeting.
Leasing terms: The leasing terms you agree to may impose hardships on your business if you agree to a long leasing term or a payment you cannot consistently afford. Reviewing your leasing terms before signing any agreement is key.
How can I apply for commercial vehicle lease financing?
At Funding Options by Tide, we work with businesses of all sizes to obtain financing. If you’re looking for car lease deals in 2024, Funding Options by Tide can connect you with more than 120 lenders across the UK to find a suitable solution for your business needs.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
