Car lease through business

[djaffacake]

Hi guys I have tried to go for an electric car lease through my business today but been declined finance. We are a distance selling pharmacy turn over is currently 30k/month, we did take the bounce back loan so not sure if this has something to do with it. The finance company has said it has something to do with our credit report but won't elaborate so I checked the report via experian and it has the following listed as red issues
overdue accounts, irregular accounting period, fall in share holder funds
key figures: Credit limit £1,000 Credit rating 700 Credit score 37 above average risk

We have an extension for the account filing till august

None of this is making much sense as I don't really understand how the ratings for businesses work and how to even go about improving them. We have obviously large supplier bills on credit terms of 30 days which just cleared every month and we never miss any payments.

My own credit rating is over 900 but the finance company did not even offer a chance to put me as guarantor.

Sorry for sounding naive, I just dont get how the lending and credit side of things work and what the reason could be why the lease was declined or how the figures of credit rating & limit work in case of businesses?

Any help would be appreciated

 

[WaveJumper]

There are other forum members who will be more apt to giving you a steer here, however my first thought would be as you current accounts have not gone in what did the previous years history look like.

 

[Mark T Jones]

Do you happen to know whether they went to just one 'house' lender, or broked it to several lenders? That will be revealing

Every lender has their own set of likes and dislikes- some are led by algorithms which can produce very odd outcomes.

If its been declined by several lenders, the picture is very different and there is clearly a big red flag somewhere

You might need to speak to a broker who specialises in car finance.

 

[djaffacake]

There are other forum members who will be more apt to giving you a steer here, however my first thought would be as you current accounts have not gone in what did the previous years history look like.

First year accounts showed losses as I gave the business directors loans to acquire the contract, salaries & advertise to literally get the customer base started from scratch.

 

[djaffacake]

Do you happen to know whether they went to just one 'house' lender, or broked it to several lenders? That will be revealing

Every lender has their own set of likes and dislikes- some are led by algorithms which can produce very odd outcomes.

If its been declined by several lenders, the picture is very different and there is clearly a big red flag somewhere

You might need to speak to a broker who specialises in car finance.

It was declined by one lender which is santander, ironically I bank with them too. The lease company have offered to approach other lenders and try to put me as guarantor. I can share the credit file with you, not sure if it allows it via private message or perhaps I can email it to you if you would be willing to have a look if you can private message me your email address.

 

[Gordon - Commercial Finance]

Do you happen to know whether they went to just one 'house' lender, or broked it to several lenders? That will be revealing

Every lender has their own set of likes and dislikes- some are led by algorithms which can produce very odd outcomes.

If its been declined by several lenders, the picture is very different and there is clearly a big red flag somewhere

You might need to speak to a broker who specialises in car finance.

I can take a look OP if you send me a message

 

[Mark T Jones]

It was declined by one lender which is santander, ironically I bank with them too. The lease company have offered to approach other lenders and try to put me as guarantor. I can share the credit file with you, not sure if it allows it via private message or perhaps I can email it to you if you would be willing to have a look if you can private message me your email address.

Contact @Gordon - Commercial Finance as above

For others - the reason you have been declined is because you are a loss making business, and prime lenders don't like that.

There are other lenders (who Gordon will know) who look at the story behind the figures.

But, do ask yourself if you really need a shiny new car at this point.

 

[djaffacake]

Contact @Gordon - Commercial Finance as above

For others - the reason you have been declined is because you are a loss making business, and prime lenders don't like that.

There are other lenders (who Gordon will know) who look at the story behind the figures.

But, do ask yourself if you really need a shiny new car at this point.

I agree it would probably be sensible to wait another year or so but the position of the business now is very different to year one. Regardless if it can't get approved we don't really have much choice the main reason was to access the bik benefits & save money on the extortionate fuel costs these days by going electric.

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[djaffacake]

I can take a look OP if you send me a message

Sent a message thanks

 

[Mark T Jones]

I agree it would probably be sensible to wait another year or so but the position of the business now is very different to year one. Regardless if it can't get approved we don't really have much choice the main reason was to access the bik benefits & save money on the extortionate fuel costs these days by going electric.

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Again - youyr choice to make

But the cost of a new EV is far greater than ank BIK or fuel-saving benefits of owning a decent used petorol/diesel motor.

If it's the environment you are worried about, then take solace n the fact that you are saving a vehicle from the scrapyard - again, far more environmental than building a new EV.

As someone who works in finance, my general view is that you are struggling to get funding for something that isn't critical for your business, you are probably not yet ready for that thing.