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How to apply for vehicle finance as a business or sole trader

Whether you’re a Sole Trader looking for a van to assist you with the day-to-day of your business or a Limited Company looking for a fleet of company cars for your employees, chances are you’ll have a number of questions regarding applying for business vehicle finance.

To help explain the process, Nationwide Vehicle Contracts has put together a comprehensive guide with everything you need to know about applying for business vehicle finance, from finance eligibility to what documentation you will need to supply. 

Checking you are eligible for business vehicle finance

Business Eligibility

Before starting the business finance application process, it is worth checking whether your business is actually eligible for business vehicle leasing.

There are many types of businesses that can apply for a business lease contract, including Sole Trader (also known as self-employed), Limited Company (Ltd), Partnership, Limited Liability Partnership (LLP), Public Limited Company (PLC) or Charity. For a business lease contract, the lease agreement must be in the name of the business and the vehicle must be insured on the company’s fleet insurance policy.

For example, a business may apply for business leasing if they are:

  • A business acquiring a company car or van for the business and private use of an employee 
  • A self-employed individual applying for a vehicle for business and private 

Business leasing, however, is not permitted if:

  • You are an individual employee wanting to use your personal car allowance - this would be a personal contract hire agreement
  • You are a director of a company looking to lease a vehicle in your name, not in the business name

Finance Eligibility

If your business is eligible for business leasing, the next step is to determine whether your business is likely to be accepted for vehicle finance

In order to lease a vehicle from Nationwide Vehicle Contracts, your business will need to undergo a credit check as part of the finance application process. When considering your application, the finance provider will check the information supplied on your finance application with credit reference and fraud prevention agencies to determine if you are a viable risk to lend to. This information will then be used by the finance provider to determine whether you are eligible for vehicle finance or not.

Other factors taken into consideration in your business finance application can include:

  • How long your business has been trading for
  • Business turnover per year
  • Up-to-date information on Companies House or other directories: Out-of-date or inconsistent information will make your business appear unreliable
  • Filing of accounts: Including your ability to submit accounts and file returns by the deadline
  • Public records: Including court judgements, bankruptcies and insolvency 
  • Details of previous searches: On your credit file and the companies/organisations that have looked at information on your file in the last 12 months 
  • Personal finances of director(s) or sole trader: Some finance providers may do a soft search on owners' personal fiances may be used as an indicator of creditworthiness

It is worth noting that businesses under 24 months’ old or start-ups with little financial information available may find it difficult to obtain vehicle finance. This is because, compared to more established businesses, start-ups typically tend to have a track record for commercial performance. This makes it difficult for the finance provider to objectively gain insight into the business and the potential lending risks involved.

If you are unsure if your business is eligible for finance, you can check your eligibility by taking our short interactive quiz.

What we need to know when filling in a business finance application

  1. 1 Company Details

    Including the company name and registered company address. We also need to know the contact name, email address and telephone number of the person who will be handling the arrangement of the lease on behalf of the business.

  2. 2 Business Details

    Including the business type (e.g. Limited Company, Sole Trader), the annual turnover and the date the business was established, along with the company registration number and VAT number if applicable.

  3. 3 Director Details

    Including their address, date of birth, marital status and number of dependants.

  4. 4 Business Bank Details

    Including the bank address, sort code and account number.

Filling out the business finance application form

The next step in applying for business vehicle finance is to fill out the business finance application form in which you will answer questions about the business and its owners.

To make it easier, the form is divided into five stages, each step dealing with a different aspect of business. Let’s talk you through the process step-by-step.

Step One - Company Details

The first page of the finance application form asks for some basic details regarding your business. This includes your Company Name and the Registered Company Address. At this stage, we also ask for the Contact Name, Email Address and Telephone Number of the person who will be handling the arrangement of the lease.

Please note, if you completing this form on behalf of a business, you are declaring that you are entitled to disclose information about the business and its owners and that you authorise the finance provider to search, link or record information at credit reference agencies about you and anyone else referred to by you.

Step Two - Business Details

As part of step two, you’ll need to confirm the Type of Business (e.g. Limited Company, Sole Trader), the company Reg Number (if applicable), the company VAT number (if applicable), the Nature of Business (e.g. Construction) and the number of Directors (if applicable).

You will also need to supply specific information regarding the Business Premises (Owned or Rented), the Annual Turnover of the business and the date the business was established, so it’s handy to have these details to hand before you complete the application form.

Step Three - Director / Sole Trader Details

Here, you will need supply details of the owners of the business. This could be an individual (if a Sole Trader), Directors (for Limited Company) or Partners (for Partnerships or LLP). Specific information we require for each individual includes:

  • Title (Mr, Mrs, Ms)
  • Full Names
  • Email Address
  • Date of Birth 
  • Martial Status
  • Number of Dependents 
  • Address History (for the last fiver years)
  • Property Status (Owned, Rented)

Step Four - Business Bank Details

At this point, you will need to provide the name and address of the business bank account, along with the sort code and account number. We also need to know the length of time you have been with the bank. This information allows the finance company to run any fraudulent checks required.

Step Five - Reviewing your details and submitting your form

This is the final section and we ask you to read through all the information you have provided and make sure it's correct. This is important as supplying false information is a criminal offence.

At this point, you will also be asked to confirm if your new agreement will be replacing an existing finance lease, purchase or loan agreement and that you accept the terms and conditions and the General Data Protection Regulation (GDPR) policy to ensure you fully understand all aspects of the contract.

Once all this is done, press submit to send your finance application back to us.

If you have any questions regarding the finance application form, contact one of our customer service team who will be happy to help.

What documentation is required during the process?

Once you’ve completed your finance application, you will then need to start preparing the additional documentation required by the finance provider. This is confirm that you actually are who you say you are and that all information you have supplied is correct.

As an FCA regulated business, Nationwide Vehicle Contracts has a legal obligation to check the identity of all our customers, both new and existing. The main reason for this is to comply with Anti-Money Laundering (AML) regulations to make sure that you are who you say you are. These regulations are in place are not only in place to protect you as a customer, but also the finance provider who is financing your lease agreement.

Essentially, to confirm your identity and the identity of the business, you need to show clear evidence of address and income to the finance company. If you can’t show this, your application will most likely be rejected.

Documentation required as a proof of ID

Limited Companies

For Limited Company applications, the Director/s will need to provide proof of ID which will be used to verify the signature on the finance documents. Accepted documentation includes:

  • Full UK Photo-Card Driving licence (valid and in date), or;
  • Full UK Valid Passport (valid and in date)

Sole Trader

For Sole Trader applications, the individual will need to provide proof of ID which will be used to verify the address and signature on the finance documents. Accepted documentation includes:

  • Full UK Photo-Card Driving licence: (valid and in date), or;
  • Old-style Paper UK Driving licence: This should also be provided alongside a copy of your passport as photo ID
  • Two utility bills dated within 90 days: For proof of address such as gas bill, electric bill, council tax bill or HRMC letter, all with the individual name on
  • Bank statements: to back up your financial situation

NB: Some lenders also require a valid passport as further proof

Partnerships

For Partnership applications, the partners will need to provide proof of ID which will be used to verify the address and signature on the finance documents. Accepted documentation includes:

  • Full UK Photo-Card Driving licence: (valid and in date), or;
  • Old-style Paper UK Driving licence: This should also be provided alongside a copy of your passport as photo ID
  • Two utility bills dated within 90 days: For proof of address such as gas bill, electric bill, council tax bill or HRMC letter, all with the individual name on

How should documents be provided

All documents must be scanned from originals as internet-printed documents are not accepted. These documents will need to be supplied in colour and either in paper form or in an acceptable file format such as .tif, .jpg, or .pdf. They also need to be clearly legible, both on the computer screen and when printed.

Any ID (especially on your driving licence) must be in your current address, and your name, address and date of birth must be spelt correctly and must match the information provided on your finance application.

If you have recently changed your name and the proof of ID is in your old name, please provide formal confirmation of the change of name by way of a marriage certificate, deed poll or decree absolute (with a copy of the marriage certificate if you are reverting to a maiden name).

Please note that some lenders may require both scanned and physical copies of documents.

Additional information that might be required

If your business is less than 24 months old, or if you’ve previously been denied vehicle finance, you may be asked to provide additional information by the finance provider.

This could include

  • 3 Months' business bank statements
  • Management accounts (if available)
  • A director's guarantee (ltd companies only)

In some cases, a larger initial rental may also be required

How long does a credit check take?

Once all the completed forms have been supplied to Nationwide Vehicle Contracts, we check them and send them to the finance provider for final processing, along with any documentation we have requested.

One of our sales representatives will have been in touch by phone to confirm the order and to run through the necessary pre-credit checks before submitting you for finance.

Please note, most funders respond to a credit application within two working days, however, during busy periods it can take up to five working days to receive a response from the funder.

When it's all done

Once all the financial details have been sorted out, the simple process of choosing and ordering your vehicle can begin.

Take a look at our vehicle ordering process to see just how easy it is. The hard part is choosing a vehicle, why not start by viewing some of our latest business leasing deals below! 

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