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If you’re looking to start a new business, a van could become an essential asset towards the success of your exciting endeavour.
Leasing a van allows for more manageable fixed monthly payments to free up your budget towards the needs of your burgeoning business.
Not only does a van allow you transport goods and equipment to execute your business wherever it is needed, it acts as an excellent tool to advertise your services when out on the road.
As an asset that helps facilitates your trade, having access to a van when you’re starting your business will help set you on the road to success.
Which is why leasing a van could be a crucial investment. Indeed, if the costs of starting a new business itself is steep, van leasing is a way to avoid the large upfront costs that come with owning a van outright by committing to fixed monthly payments instead.
Leasing a van means you’ll still have access to the brand-new van of your choice as if you were buying it outright.
However, by leasing the van instead, you will pay fixed monthly payments determined by the length of the contract term, the initial rental payment and the annual mileage you expect to cover.
Van leasing requires an initial rental at the start of your agreement, or the equivalent of three-monthly payments. Once paid, you will only make a single payment each month thereafter.
The amount – which is determined at the start of the agreement - will be fixed throughout the term with no nasty surprises. As a fixed payment, it should allow you budget confidently going forward and allow you to concentrate investing funds into your business instead.
At the end of an agreement, you will be compelled to sell the van to cover the final balloon payment. By selling the van on behalf of the finance company, it is not uncommon to earn a profit from the sale, so it is recommended you endeavour to keep the van in a good condition during the term.
Van leasing agreements are tax deductible, giving you important financial benefits towards your business.
Offsetting your monthly lease payments by deducting them against your taxable profits.
Under HMRC rules, van lease payments are considered an allowable business expense, which means you can subtract them from your profits and reduce the amount of tax your business will have to pay.
For businesses paying Corporation Tax, this can be particularly useful and by lowering your taxable profits, you can save up to 25% (or the applicable Corporation Tax rate) on the cost of your van lease.
