How to Improve Your Chances of Getting Approved for Van Finance

Not many small businesses or one-man bands have the capital to buy a new van (or even a used van) outright and need to rely on finance to complete the acquisition. Although the time-honoured way of financing a vehicle purchase would be to get a bank loan, more and more people are finding the strict lending criteria imposed by traditional lenders an impenetrable barrier. Luckily, there are other options, and these take the form of finance companies that are more flexible in providing the finance that small businesses need but struggle to obtain through the usual channels. 

Some lenders, even those with more flexible rules, may carry out some sort of credit check before they will release funds so it may be a good idea to try and improve your credit rating yourself before you apply for finance. Although some finance companies will release funds to those with bad credit or no credit history, particularly well-established vehicle finance companies, trying to improve your credit rating is never a fruitless exercise and could see you presented with a series of options for used vans finance deals in the UK rather than just one or two. Please see below for a few tips for increasing the likelihood of being approved for used van finance, this list is by no means exhaustive but should serve to point you in the right direction if you want to take steps to enhance your chance of getting approved for used van finance.

How to increase the chances of getting approved for used van finance

  • Check your credit score – It may seem like an obvious first step in improving your chances of being approved for used van finance but a step that many people may overlook. Checking your existing credit rating will give you some indication as to your credit rating and therefore securing van finance at the first time of asking, you can be sure that any potential lenders will also make this check prior to processing your finance application. You can check your current credit score online using platforms such as Credit Karma, Experian and Equifax. 

To potential lenders, red flags such as missed or late household bill payments or mobile phone payments will all show up on your record. Making sure you meet your existing financial obligations before you apply for any type of finance is crucial as a refused application will also negatively affect your credit score, reducing your chances of securing the finance you need further.

Even if you have defaulted in the past on payments, all might not be lost, there are several things you can do to rebuild your credit score which is detailed in the remaining tips below.

  • Electoral Roll Registration – Being registered on the electoral roll allows lenders to check your address and credit history quickly and easily. This simple measure, which can be completed online in minutes, lets the used van finance lender know you are who you say you are and a UK citizen with the right to vote. Some lenders may discard your application based on your absence from the electoral roll alone, so whatever you do to improve your chances of being approved for used van finance make this number one!
  • Joint Application – Another seemingly obvious way to get approved for used van finance if your credit score isn’t as strong as you’d like is by making a joint application. If your partner/wife/husband/significant other/investor has a strong credit score, a joint application is a great way to get the used van finance you need. Although your name will be on the application, the lender will assess your credit scores individually and should make their decision based on the stronger applicant. 
  • Make a Deposit – When it comes to buying absolutely anything with a degree of finance, a deposit really can help, and the bigger the better! Putting down a decent deposit not only reduces the amount of interest paid on repayments but can also significantly improve your chances of getting your application approved by a lender. This is one of the key strategies for improving your chances of getting used van finance and is an element that potential lenders look very favourably on. As previously touched upon, putting down a large deposit makes good business sense so if your credit score isn’t as good as it could be, make every effort to secure as much capital as possible to use as a deposit – this initial outlay will be worth it!
  • Avoid making multiple applications – As previously mentioned, getting turned down for used van finance also affects your overall credit score. Make sure you do everything you can to improve your credit score before making an application. Many people fall into the trap of making minor adjustments in an effort to improve their credit score and then apply again with every refusal being noted on their credit record. This can be very demoralising on a personal level, so make sure you get all your ducks in a row first!
  • Guarantor – Having a guarantor is arguably the easiest way to get approved for used van finance or any other loan application. From the lender’s perspective, having a guarantor for the application essentially doubles their chances of being repaid. If you have confidence that your business will succeed and your guarantor shares this confidence, this is a good way to get the finance you need quickly. A guarantor does not need to be related to you (although many guarantors are related) nor reside at the same address. Providing their credit score is acceptable for the finance applied for, this is probably the best way to get your van on the road in double quick time. 

Is used van finance the right option for me?

Used van finance deals are essentially an integral part of business expenditure and used for start-up and established businesses alike. The main advantage of used van finance deals is that they allow the business or self-employed worker to manage their purchase as an affordable monthly expense rather than an unaffordable outright purchase. Used van finance from dedicated specialists can also be beneficial in regard to those with bad credit history. Although the interest rates may be higher than those offered by mainstream lenders such as banks, they can provide a much-needed lifeline for start-ups and the self-employed.

 Provided you take heed of the main considerations detailed above, there is no reason why you can’t make an application for used van finance and push on with your core business functions. Another plus of used van finance is that your credit score improves every time you meet a payment date.

How to apply for used van finance

Before you apply for used van finance, potential lenders will need a few basic details which although obvious for most readers still need to be mentioned.

  • Proof of Identity – Of course, any potential lender will need to confirm you are who you say you are to consider your application. A full UK driving licence is the most important piece of evidence you can provide and perhaps a notarised passport copy for some applicants.
  • Proof of Address – As well as being able to confirm your identity, you will also need to provide evidence of your address. Recently dated utility bills, council tax bills and bank accounts with your name and address are commonly accepted. 
  • Proof of Income – Another blindingly obvious point but you will also need to show proof of income. This could be in the form of a recently dated bank statement and/or payment slips from your employer. Your potential lender will tell you if you need to provide any additional documentation. 

Contacting Used Van Finance Deals

If you are in need of a competitive used van finance option and want to deal with people that know what they’re talking about, please get in touch with us today. Our experience in facilitating used van finance deals for all manner of people has seen us become one the most trusted names in the sector. If you have any questions about the services we offer or would like to clarify anything before making your used van finance application, we can help. Call us during normal business hours or complete the online enquiry form on our ‘contact us’ page at any time.