What documentation lenders need
- Last 2 years' filed accounts (or management accounts if more recent)
- Certificate of incorporation
- Proof of trading address
- Director(s)' full name, date of birth, and proof of address
- 3 months' business bank statements
- Company credit check (the lender runs this)
Tax treatment of van finance for limited companies
The tax treatment depends on the product chosen. With HP, the company is treated as the owner from day one and can claim the Annual Investment Allowance (AIA) on the full purchase price in year one. With Finance Lease, the company cannot claim capital allowances directly (the leasing company does), but lease payments are deductible as a business expense. With Contract Hire, the monthly rental is 100% deductible as a business expense.
VAT recovery on van Finance Lease
For VAT-registered limited companies, Finance Lease has a cashflow advantage: VAT is charged on each monthly payment rather than on the full purchase price upfront. If the van is used exclusively for business, 100% of the VAT on each payment can be reclaimed. For HP, VAT on the full purchase price is paid upfront (or through the deposit and payments) and reclaimed via the company's VAT return.
Director's guarantee requirements
Most lenders require a director's personal guarantee for van HP or Finance Lease. This is standard and does not indicate a problem - it simply provides lenders with an additional layer of security. Established companies with strong balance sheets and long trading history may be able to negotiate terms without a personal guarantee, but this is not typical.
How to get the best rate as a limited company
The key factors are trading history (2+ years preferred), credit history (both company and director), annual turnover, and the asset being financed. Competitive HP rates for limited companies start from 7.9% APR for the strongest profiles. As your independent broker, we'll compare multiple lenders and ensure you receive the most competitive terms available.