A business fleet can play many roles on behalf of your business and can be especially useful for delivering to customers, picking up supplies, picking up customers, accelerating national growth, as well as a branded marketing tool on the roads. Running a business fleet can seem like a daunting prospect with the costs involved but this can be resolved through business car leasing.
Business fleet leasing is a great way of getting new vehicles for your business while protecting your cash flow. This essentially means that you’ll lease the car for an agreed period of time, with a fixed number of miles, and a fixed monthly fee.
If your business needs a number of company cars, fleet leasing could potentially be your best option.
When your business requires a whole fleet, you'll usually have three options when the contract ends:
- Agree on a second lease period (which may have cheaper payments, as the vehicle(s) will be older)
- Agree on a new lease and upgrade your vehicles
- Return the cars and end the lease
- Can be used as an employee incentive.
- Leasing is often cheaper than purchasing vehicles for the full amount.
- You don’t have the burden of disposing of the vehicles once the contracts are up.
- Can be subject to mileage and condition restrictions; failure to comply will result in extra charges.
- Since it is on a lease contract you will not own the vehicles; these are not classed as an asset within the business.
We were approached for advice on taking out a loan in order to purchase multiple vehicles for the client's business. They are a young construction sub-contracting business that specialises in pouring concrete on larger development projects; such as student accommodation and hospitals.
By acquiring multiple vehicles for the business, it will give them the opportuning to expand their services, and hire further staff to increase revenue as well as finishing jobs earlier. One of our experts at Think Business guided and advised on the best loan type based on the business' wants and needs. It was agreed that the best option would be asset-based finance due to the type of asset and wanting to lease the vehicles.
Asset-based finance is a type of lending that allows business owners to finance new assets such as equipment, machinery, and vehicles. As well as this, it also enables businesses to release finance from the value in assets the business already owns.
Benefits of using asset-based finance
- Due to the loan being asset-based, you can invest in the assets multiple times.
- Get the finance quickly due to the loan having fewer qualification criteria.
The loan kickstarted the client's expansion, with access to multiple vehicles without impacting their cash flow. Due to the nature of the loan, the business was able to do this quickly and the process was made simple and stress-free with the experts at Think Business Loans.
To get more information on asset-based finance please click here.