What is the best way to fund company van

[Koksmanreikals]

Hi, because my personal van has done a huge amount of miles now I am considering how to buy van for company in a tax efficient way.

I will buy something in a price range of £10,000+VAT. Van will be used only for business. Business is VAT registered. I could buy it straight away from company's cash but I prefer to buy it with loan and pay it off within 5 years. (Only if interest rate is reasonable low)

Lease is not an option because I am tradesmen and I make alterations to van to suit my needs. Such as custom internal racking, additional locks for security etc,

What finance options is available for new limited company? Incorporated July 2023.

I have seen start up loans backed by government at fixed 6% interest rate. Is it suitable for this case?

Thank you in advance for those who will give me some ideas how to get it sorted.

 

[fisicx]

A question for @JEREMY HAWKE methinks.

 

[Mark T Jones]

Presumably used at £10k? Which will exclude you from dealer subsidy schemes (Ford are currently doing 0% on vans)

Personal loan?

Start Up Loan is good, but may be heavy-handed for van finance - unless you already have a business plan & projections?

 

[Koksmanreikals]

Presumably used at £10k? Which will exclude you from dealer subsidy schemes (Ford are currently doing 0% on vans)

Personal loan?

Start Up Loan is good, but may be heavy-handed for van finance - unless you already have a business plan & projections?

Yes used van. In price range aprox 10k+VAT

I want van in company name so I can recover VAT, pay for fuel and repairs from bussiness account. Can I achieve it with personal loan?

 

[JEREMY HAWKE]

I never borrow any money to fund vehicle purchases as they are worn out before the loan is paid off as it does 250K in 32 months almost
I have only recently purchased cheaper vans with cash and its probably not the most tax efficient way.

The main vans are new but on long term hire this is fully tax deductible but it is only worth it where a vehicle is pulling in good money everyday itself

You could take the loan and loan the money to your company via the DL

 

[Mark T Jones]

Yes used van. In price range aprox 10k+VAT

I want van in company name so I can recover VAT, pay for fuel and repairs from bussiness account. Can I achieve it with personal loan?

As @JEREMY HAWKE says, personal loan - lend money to company

however, you need dedicated tax advice

Start Up Loan is also a personal loan

 

[fisicx]

I want van in company name so I can recover VAT, pay for fuel and repairs from bussiness account. Can I achieve it with personal loan?

Do you pay VAT on used vehicles?

 

[Koksmanreikals]

As @JEREMY HAWKE says, personal loan - lend money to company

however, you need dedicated tax advice

Start Up Loan is also a personal loan

Can I apply for personal loan if company incorporated in July and haven't traded for 12 months yet?

Do you pay VAT on used vehicles?

Yes most of used Vans is +VAT from dealers because VAT was reclaimed by previous purchasers

 

[JEREMY HAWKE]

Off the topic The one thing that customers ask that really winds me up is
"Why do you hire your vans surly it would be better to buy them"

"Yes I will send out one of our paid for vans . One of those red Movannos in the yard and then you will have something else to moan about when its stranded on the M6 with another computer issue /undiagnosable fault "

 

[WaveJumper]

What sort of condition is a van in for 10k would it actually last the length of you finance

 

[Koksmanreikals]

What sort of condition is a van in for 10k would it actually last the length of you finance

I'm looking at small vans. For aprox 10k+VAT I can get something like Transit connect, Berlingo van with 100k miles. It's not the end of the world if it brakes before finance ends.

My last van was Transit which I bought in 2016 with 113k miles and it lasted kinda well for me. Now 260k miles. If van breaks you can always fix it. When I look at newer vans I do understand that I pay big premium because its newer but all I need from it is to reach point B from point A. Nothing else.

I'll try to explain why I would like to finance it even if I could buy it straight away:
Well If I buy it straight away, I will spend lets say 10k today. But if I finance it it's gonna cost me ~180£ per month. I think I would better off if I pay myself dividends and invest into Stock market than saving 6% on interest.

P.s. I think I would pay loan before term to save on interest. If enough cashflow