We’ve heard the bleak stats time and again: nine out of 10 startups will fail. As if small business owners didn’t have enough to worry about. The trick is to learn from the lessons of the past to ensure success in the future. Take vehicle financing as a case study. New business owners in need of a fleet often blow up their balance sheet on leases and personal loans. But you can’t run a business treating company expenditures as a personal investment. Enter corporate car-hire purchases. The advantages of this particular type of vehicle financing are not new news. Indeed, financial organisations have been reporting on the benefits of car-hire purchases for years.
Here are six cogent arguments to convince any startup to choose business deals over personal vehicle contracts.
It wouldn’t be noteworthy if it didn’t save the typical small business owner cash. The reason rates are so low with this type of financing is because the party in question only owns the vehicle once he or she pays it off. Until the business pays off the balance of the loan, the financier owns the vehicle. In this manner a startup can finance a new automobile and pay lower monthly fees than is common with personal auto loans. Many financiers offer competitive deals, such as fixed-interest rates and low quotes. And of course there is the benefit of a tax write-off when the vehicle financing is used for business purposes.
You can get car-hire financing even with bad credit
Many companies advertise financing to those with bad credit histories—the trick is finding those lenders who follow through on their promise. Those who do have a checkered credit past will want to look for the option with as few hoops to jump through as possible. That means no paperwork, no loan deposit and no third-degree interrogations. While it isn’t possible to guarantee financing to every borrower under the sun, gorapid.com.au has a proven track record of offering financing to those who otherwise do not qualify.
The freedom to choose your vehicle
Those who think a corporate car-hire purchase will limit their options are in for a nice surprise. Not only can businesses choose between new and used cars, they have their pick between dealer and private-seller vehicles. This allows for near limitless automobile options. Business owners also have the freedom to decide what features they need or want, and whether a new car or used vehicle is the right option for their operation. There’s even helpful online tools to assist folks when making the decision about which vehicle is right for them.
Not only is it possible to get corporate car-hire quotes immediately online, it’s also possible to tailor repayment plans according to specific budgets. For example, many financiers offer loan terms ranging from two to five years with an APR of 0% to 60%. These numbers depend on a variety of criteria, such as the age of the vehicle in questions. Additionally, those who want to further reduce the loan size have the option to add a deposit. Repayments can also be structured in a way that allows for businesses on more rigid budgets to meet their monthly payment obligations.
Because customers who opt for a corporate car-hire do not own their vehicles outright, they are at minimal risk should they default on their monthly payments. Having said that, there are risks to hire purchases. Should the person who finances the vehicle fail to meet their monthly requirements, the financier can repossess the vehicle. This is a direct consequence of the finance company owning the vehicle until the borrower makes the final payment. Having said that, the borrower owns the vehicle outright once said final payment is made.
The numbers add up
It’s all well and good to hard-sell startups on the advantages of this tactic or that method. But due to the very nature of personal versus business leases, the retail contract is always going to be more expensive than the commercial contract. This is due to the other considerations at play for personal finance customers, such as allocating for increased equity, which results in higher monthly payments. Also, through some simple and above-board accounting tricks, it’s possible to keep the vehicle investment off the books completely, resulting in nothing more than an easy monthly payment.
The above data represents some of the reasons businesses big and small should consider a company-hire purchase over traditional auto loans. It’s a viable option that often flies under the radar due to traditional reliance on personal financing. But those who err on the side of tradition are at risk of missing the greater deals right underneath their noses.