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Van Finance Lease

Lower payments, and reclaim the VAT on your van.

A finance lease lets your company use a van for fixed monthly rentals, with a lower upfront outlay than buying. You reclaim VAT on the rentals, and at the end you can sell the van and keep most of the proceeds.

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Subject to status and eligibility. Van Finance Limited is a credit broker, not a lender.

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What a finance lease is, in plain English

You choose the van; the lender buys it and leases it to your company over an agreed term. You pay rentals that cover the cost plus interest. At the end there’s usually a final “balloon” based on the van’s residual value, or you sell the van as the lender’s agent and keep the bulk of the sale proceeds.

It keeps more cash in the business than hire purchase, and the rentals are usually fully allowable against profits.

The VAT and tax angle

  • VAT: if your company is VAT-registered you can typically reclaim 100% of the VAT on a commercial-vehicle finance-lease rental (cars differ). See HP vs lease — tax treatment.
  • Profit & loss: rentals are generally an operating expense, which can be simpler than capital allowances.
  • Cash flow: lower initial outlay than HP frees up working capital.
  • Tax treatment depends on your circumstances — confirm with your accountant.

Who a finance lease suits

It works well for VAT-registered limited companies that want lower monthly costs, plan to use the van for the medium term, and like the idea of recovering value at the end without the full cost of ownership up front. It’s popular where cash flow matters more than eventual ownership.

Example costs

Representative example: borrow £18,000 over 48 months at 9.9% APR representative. 48 monthly payments of approximately £456. Total amount payable about £21,888 (excluding any deposit, option-to-purchase or documentation fees). This is illustrative only and not an offer — your rate and payments depend on the lender, the vehicle and your circumstances, and are subject to status.

A finance lease usually shows a lower monthly than HP for the same van because a residual is deferred to the end. Get exact figures from the panel.

✓ Upsides

  • Lower upfront cost and often lower monthlies than HP.
  • Reclaim VAT on the rentals (VAT-registered companies).
  • Rentals are typically allowable against profits.
  • You keep most of the sale proceeds at the end.

• Things to weigh up

  • You don’t automatically own the van — there’s a residual/balloon to manage.
  • You’re responsible for the van and its disposal at the end.
  • A final balloon payment or sale is required to close the agreement.

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Follow the simple 3 step process to finance your business today.

Once you have completed the first step, we will arrange a call to answer any more detailed questions you may have and move quickly through steps two and three to get your financial requirements successfully approved.

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  1. 01

    Complete the Form

    Complete the simple form below and apply online for the amount you need to grow your business

  2. 02

    Receive Fast Approval

    We will process your application and aim to get you approved for your desired amount in 24 – 48 hours

  3. 03

    Get Funded

    Congratulations! Now you’ve been approved, you can acquire the assets you require to grow.

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Frequently asked questions

Can I reclaim the VAT on a finance lease?
VAT-registered companies can usually reclaim 100% of the VAT on commercial-vehicle finance-lease rentals, provided the van is used for business. Speak to your accountant about your specifics.
What happens at the end of a finance lease?
Typically you sell the van (as the lender’s agent) and keep most of the proceeds against the residual, or extend for a peppercorn rental. You don’t simply hand it back as with contract hire.
Is a finance lease better than hire purchase?
Neither is “better” — HP is for owning and high mileage; a finance lease keeps cash in the business and can be more VAT- and cash-flow-efficient. Our comparison lays it out.

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