If you’re a self-employed business owner, you may be in the market for a business vehicle and considering taking out a loan to do so. Business vehicles can help with a range of potential hurdles you may face as a business owner and can help to amplify your business and drive more promotional aspects.
We’ve seen growth in self-employment rates post-pandemic, including a growth in mobile businesses with even spas taking their business on the road. However, if you don’t want to go as big as a van for your business, advertising information like your business name, email, and phone number on your car can help to generate more traction for your business.
On top of this, demand for taxis and privately owned taxi companies such as Uber and Bolt has increased in the UK over recent years, which has led to an increase in drivers. Most privately owned taxi companies come with a subscription service which allows you to use your own car and pay a weekly or monthly fee to use their system to pick up passengers.
If you’re planning on using your car as a taxi, you should check with your lender if it is permitted. Often lenders won’t allow you to use your car as a taxi, this could be because of potential damage to the vehicle and increased mileage. However, if you do wish to use your car as a taxi for some extra income, you can do so through taxi finance.
Whether a business vehicle is a second car for you or your only mode of transport, getting car finance can help make it more affordable with easy-to-manage monthly payments based on your income and business turnover.
There are different options to finance your car or van, including a Personal Contract Purchase (PCP) which gives you the options to return the car, keep it, or trade it in, or a Hire Purchase (HP) which results in ownership at the end of your finance agreement. Some people will get a personal loan from the bank, but since this is an unsecured loan it can be more difficult to get.
Knowing which one is for you is dependent on what you’re looking for at the end of the agreement. It’s worth noting that finance companies may not be agreeable to customisations of the vehicle if you’re planning on returning it (PCP). This is something you should discuss with your lender.
If you’re considering a loan to by a car there is a few things you will need to have ready for the finance company or bank to look at, this will include proof of income and you may have to prove that your business is stable and profitable.
Everyone who applies for car finance, regardless of what type, will be subject to a credit check, whether it will be a hard check which will leave a mark on your file is dependent on what stage your application is at.
Whilst getting a car loan whilst self-employed is viable, there are some obstacles you may have to handle. This isn’t anything complicated; it simply comes down to the fact that lenders sometimes request more information when it comes to providing car loans to those who are self-employed.
Generally, this is more information on your income and business. This could include tax information from the last three years, bank statements to prove income, and proof of trading history. It’s important that you can provide these things as it can impact your interest rate with the lender.
Self-employed car finance has many benefits for your business and is entirely feasible. Whether your business is dependent on your vehicle, or it’s something to help you get from A to B, getting a car loan can help you achieve your business dreams by helping you with advertising, independent travel, or helping to make your business mobile.
Getting self-employed car finance has both its pros and cons when applying, but it’s worth it in the long run for you and your business. Just be sure when you’re applying that you have all of the relevant information and documents for the lender, and that your credit history is in good standing.
Applying for a car loan can help you to expand your business in an affordable manner, if you’re looking for a business vehicle that you can pay off over an agreed period of time, then car finance may be for you. Just make sure to review your documents before applying and make sure to shop about with lenders to get the best deal for you and your business.
