What is a Company vehicle credit?
Different banking solutions can finance the acquisition of one or more vehicles on a professional basis, it is important to choose the right credit.
Some companies have greater mobility needs than others, so it is necessary to equip yourself with professional vehicles to be able to ensure the progress of the activity. If some companies are only going to need a few vehicles, others will have to manage a fleet of cars and other utilities, the question of financing becomes very important.
Finance the acquisition of a company vehicle
There are several solutions to be able to finance the purchase of one or more vehicles, the company can turn to professional car credit, but it can also have recourse to financing by leasing. This involves renting the car and then buying it if necessary by paying the amount of the residual value.
In both cases, the company will have to request a specialized credit institution ( either directly or through an intermediary), a request will have to be established and the solvency of the company will be carefully studied.
It is important for a company in activity to provide the latest balance sheet, the gross operating surplus will be verified as well as other elements specific to the activity of the company.
It is important to provide guarantees and in particular a personal contribution to more easily obtain a professional credit. Note that it will be necessary to take into account the total cost of the TVS (tax on company vehicles) if the company opts for a particular vehicle.
Professional car credit
The car loan is a professional loan belonging to the family of consumer loans, it can finance a vehicle purchase of a maximum amount of 75,000 dollars and over a maximum repayment period of 7 years. When the company applies for this type of loan, it receives the sum directly to enable it to finance the purchase of the car, then it repays the debt with its creditor, each month.
The interest rate will play an important role, so it is strongly advised to compare the proposals to reduce the cost of credit, especially if the company needs to make several acquisitions. Auto credit has the particularity of impacting the debt of the company, the more the latter will accumulate credits and the less it will be able to borrow from banks.
Rental with option to purchase
The company has the option of opting for a rental with option to purchase, it involves setting up a rental contract for a new vehicle, choosing the options of use (mileage, maintenance, warranty …), the company may repurchase from the 13th month to become the vehicle owner, a call option will be set each month until the end of the contract.
This financing solution has the advantage of paying rent rather than a monthly payment, even if the is financed by consumer credit.
Leasing has the advantage of not appearing on the balance sheet, so it is an expense and it does not impact the company’s debt ratio. Obviously, the company does not own the vehicle and if it wishes to return it, it must ensure that the vehicle is in good condition.