Finance lease (not HP / PCP etc)

How can new company get a 2-4 year hire/lease? Any recommended companies?

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I have a couple of clients currently trying to get 2-4 year hire contracts for electric vehicles for their ltd co's (BMW in one and Vauxhall in the other)

The owner-manager in both cases have excellent *personal* credit history, but the company in each case has not been around for long enough to have its own good credit score.

The directors are willing to give personal guarantees if needed, but neither has had any luck finding deals so far!

Can anyone recommend any leasing companies / brokers / other avenues to look into ?

 

Replies (6)

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By FactChecker
17th Apr 2024 16:16

If you were the leasing company would you open your arms to new clients who, by definition, have limited liability and no track record (and might disappear tomorrow)?
They like to do business, but are not natural risk-takers (and rightly so).

Your clients could of course take on the finance lease personally (given their "excellent *personal* credit history") - and take the consequences.
They can't just have something because they want it (whatever their mates may have told them).

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Replying to FactChecker:
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By rmillaree
17th Apr 2024 16:44

that is probably the reason but really i have to presume limited company employees/owners are probably the highest % target customer group due to tax benefits when you are limited.

seems crazy that they wont take personal guarantee and do credit checks in same manner as they would do if they leased direct to the invididual - if they would lease to then individual on credit checks and they are willing to offer pg is there really any extra risk by doing credit checks on individual then getting pg?

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paddle steamer
By DJKL
17th Apr 2024 16:53

Implementing personal guarantees if needed is tricky, banks may do them but they likely need to be big sums to be worthwhile.

If the paperwork is not tight, if the party giving the guarantee has not taken their own legal advice etc, the guarantees can be worthless bits of paper that cannot be enforced.

This is why I much prefer with our commercial leases to take a much bigger deposit (cash in hand) instead and am very reluctant to take director/shareholder personal guarantees for newco tenants.

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Replying to DJKL:
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By rmillaree
17th Apr 2024 17:19

good points DJKL

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By FactChecker
17th Apr 2024 18:37

"highest % target customer group" indisputably ... but not at any price (or rather at any amount of risk).

And trying to use a PG to recover money owed (by a different entity) under the original contract is not the cinch that one might assume. There are a lot of ways in which the various parties can fail to 'play ball' and thereby make recovery both arduous and expensive - not words likely to appeal to the lessor.

Oh and they're not exactly short of potential (less risky) clients.

EDIT: just seen DJKL's similar response (curse the order in which these posts appear), which has the benefit of real life experience to back it up.

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Melchett
By thestudyman
18th Apr 2024 17:18

Directors should consider either wait a year until more trading history, or using their own car and claiming mileage on business travel.

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