Van Finance for Builders

Van finance for builders is commercial vehicle funding arranged for construction companies and contractors, most often across several vehicles at once. Two things set it apart from a single van purchase: converted vehicles such as tippers and dropsides need a lender who will fund the finished vehicle rather than the chassis cab beneath it, and vehicles bought to service a new contract can often be agreed in principle before that contract is signed.

Construction rarely needs one van. It needs three tippers by the second week of March, or a dropside and two panel vans because a project has just been awarded and the site starts on the first of the month.

That creates a problem most finance providers are no help with. You cannot justify buying the vehicles until you have the contract, and you cannot comfortably accept the contract until you know you can get the vehicles. This page is mostly about how we break that circle, and about funding converted vehicles properly.

Looking for a different trade? See our van finance by trade guides.

Finance agreed before you sign the contract

This is the part that matters most, and it is the reason construction companies come to us rather than to a dealer.

When a project is offered, the resource it needs becomes clear quickly. So many vehicles, so many people, over so many months. The vehicles have to be on site from the start, but committing to them before the contract is signed is a risk, and signing the contract before you know the vehicles are funded is a bigger one.

We work the problem from the other end. Send us a copy of the contract, or the letter of intent, along with what you need and when. We put that in front of the lender so they can see the income the project will generate, rather than assessing your business as though the vehicles were a speculative purchase. In most cases that produces a provisional acceptance.

You then know the funding is there before you commit. You can accept the contract with confidence, and the vehicles arrive in time to start on site.

If you are pricing a job now and the vehicles are the thing giving you pause, talk to us before you submit rather than after you win it.

Financing several vehicles at once

Construction applications are rarely for a single vehicle, and there are two ways to structure them.

Where you need everything at the start of a project, we arrange finance across all the vehicles together. That is usually cleaner than several separate applications and gives the lender a single picture of the business rather than a series of unconnected requests.

Where the need is staged, or where you expect to grow but do not yet know the timing, we can put an agreed credit limit in place instead, sometimes £50,000 or £100,000 depending on the business. The funding sits there for the coming months, so when the next phase starts or another gang is taken on, the vehicle is already covered and you are not waiting on a fresh application.

For a company that wins work in lumps rather than evenly, that facility is usually worth more than a small difference in rate.

Tippers, dropsides and converted vehicles

This is where a lot of construction finance falls down elsewhere, and it is something we specialise in.

A tipper or a dropside is not a vehicle a manufacturer sold complete. It is a chassis cab with a body built onto it by a specialist converter, and the conversion is a substantial part of what you are paying for. Plenty of lenders value the chassis cab and stop there, which leaves a gap between the invoice and what they are prepared to advance, and the buyer is asked for a deposit to cover the difference.

We work with lenders who will fund the completed vehicle, valuing the conversion alongside the chassis, provided the work has been carried out professionally by a proper converter. That applies to bespoke builds as well as standard tipper and dropside bodies.

If you are buying a converted vehicle, tell us who built the body and send us the specification along with the invoice. Presented properly, the finished vehicle is what gets funded.

For more on the vehicles themselves, see our tipper van finance and Luton van finance pages.

The vehicles construction businesses finance

We finance all of these, new and used, individually or together.

What we can arrange that a dealer cannot

Dealer finance is convenient and sometimes the rate is genuinely competitive. What it rarely includes is any of the following.

Provisional acceptance against a contract

A dealer can quote you finance on the vehicle in front of you. They cannot look at the contract you have been offered and agree funding on the strength of the work it will bring in.

Funding for the completed converted vehicle

A dealer's finance desk generally works to the guide price of the base vehicle. We work with lenders who will fund the conversion as well, so a professionally built tipper is financed at what it is actually worth.

VAT deferral

On qualifying agreements the lender pays the supplier the full price including the VAT, then collects the VAT element from your business as a single payment after an agreed period, usually around three months. That gives you time to reclaim it from HMRC first. There is no charge for the facility. Across three or four vehicles at the start of a project, that is a significant sum staying in the business through a full VAT quarter.

Little or no deposit

Dealers commonly ask for 10 to 20 per cent down. For a VAT-registered limited company with a reasonable credit profile buying at sensible prices, no deposit at all is a normal outcome with us.

Specialist business finance advice

A dealer's finance desk sells a finance product. Buying through the business changes the position considerably: a VAT-registered business reclaims the VAT, and under hire purchase the vehicle is treated as plant and machinery, so the cost can be written off against taxable profits through capital allowances with the interest element deductible separately. We are a broker rather than accountants, so your accountant has the final word, but we will structure the agreement to suit how the business is set up.

New and growing companies

New limited companies and businesses under two years old can apply. In construction that often means a company set up specifically for a new venture by people who have worked in the trade for years, which looks like a start-up on paper and is nothing of the sort.

Where there is trading history behind the company, we put it in front of the lender alongside the directors' background, so the underwriter sees the full picture rather than a company with no filed accounts. Where the application is tied to a contract, that contract does a great deal of work too.

A deposit is usually required for a newly formed company.

Van finance with a difficult credit history

A poor credit history does not prevent a construction business from financing vehicles. We work with specialist lenders who assess the whole picture rather than an automated score, and strong recent trading often counts for more than something that happened three years ago.

A deposit and well chosen vehicles both widen the options.

Who can apply

Limited companies can borrow from £10,000, which covers most construction vehicle purchases comfortably. Sole traders can borrow from £25,000, on unregulated credit agreements, because the lenders we work with offer commercial finance only.

Established contractors, newly formed companies and businesses taking on their first large project are all welcome to apply.