Can a limited company get van finance if a director is in an IVA?

Can a limited company get van finance if a director is in an IVA? Yes, in the right circumstances. A limited company is a separate legal entity from its directors and can enter into a finance agreement in its own name. What decides it is the strength of the business, because the lender is relying on the company and on the vehicle rather than on the director. Where a lender does want a personal guarantee, that needs your IVA supervisor's written agreement before you sign anything. Lenders will review the director's personal credit alongside the company's position either way.

Yes, it is possible, and we place these.

What it comes down to is the company. A limited company is a separate legal entity from the people who run it, and it can take on a finance agreement in its own name. If that business is trading well, there are lenders who will look at it properly rather than stopping at the director's personal file.

What you need to understand before you start is where your IVA supervisor comes into it, because that depends on how the deal is structured.

Some lenders will do this without a personal guarantee from the director. The company is the borrower, the vehicle is the security, and the director is not taking on any personal liability. Whether that needs your supervisor's involvement depends on the terms of your own arrangement, which is a conversation to have with them rather than an assumption to make.

Other lenders will want a personal guarantee, and will lend if they get one. That route is still open to you, but it is not your decision alone. A guarantee makes you personally liable for the company's borrowing, and on a vehicle agreement that is personal exposure of far more than £500. The standard IVA terms say you must not obtain credit of more than £500 without your supervisor's prior written approval, and that doing so is a breach of the arrangement. So this route needs your supervisor to agree in writing before anything is signed.

That is not the same as the answer being no. Supervisors do agree to these. But it is their decision, and to make it they will want to understand the terms of the agreement the company is being offered, what is being financed, and what the borrowing is going to do for the business. A van that lets the company take on more work is a very different proposition from one that does not, and that argument is worth making properly rather than in passing.

This is the question we are asked most often, and the answer is more encouraging than people expect.

If you have your certificate of completion and the arrangement is finished, you are in a considerably better position. It will still be on your credit history for a while, so a lender will see it, and it still counts as adverse credit. But having completed it is a genuine positive rather than a neutral fact. It says you entered an arrangement, you kept to it for years, and you saw it through. Lenders read that for what it is.

If you are still in the arrangement, it is harder, but it is not the end of the conversation. It just means the company has to carry more of the case, and the supervisor may need to be involved.

If you have completed yours and have been assuming the answer is still no, it is worth asking again.

Bank statements. Usually the last three to six months, for the company.

That is the document that decides it. Not a credit score, not a projection. What a lender wants to see is money coming in consistently, the account being run properly, and a business that plainly generates enough to cover what it is asking to take on.

If those statements look strong, there are lenders who will do it. If they do not, nothing else on the file is going to carry it.

Even when the company is in good shape, expect your own credit file to be reviewed.

This surprises people, because the company is the borrower and it is a separate legal entity. Both of those things are true. But you control the business, and in Companies House terms you are very likely a person with significant control over it. No lender is going to fund a company without forming a view of the person running it.

They are not looking for perfection. They already know about the arrangement. What they are checking for is anything else that gives them pause, things that were not mentioned, patterns that do not fit the story you have told them.

If you are not the only director, the picture changes, and usually for the better.

A lender forming a view of a company looks at the people running it, not just the one with the problem. A business with three directors where one is in an arrangement and the other two have clean files is a different proposition from a company with a single director in the same position. The arrangement is still on the table and still has to be dealt with, but the lender has more to work with.

If that describes your company, it is worth saying so early rather than letting it come out later.

Expect questions along these lines. How long you have been in it. How much you owed when it started. How much is left to run. How much you currently owe.

None of those have a right answer. They let the lender understand where you are in it, because there is a very large difference between somebody three months into an arrangement and somebody who has been paying steadily for four years with one to go.

There is also a pattern worth naming, because it describes a lot of the people who ask us this. The company was started before the arrangement. Things were difficult for a while. The business has since recovered and is doing well, but the arrangement is still running, because the monthly payment is modest and it was set up to run for years at that level. People are often content with that, precisely because the payment is small.

That is not a failing business asking for help. That is a successful one carrying something from its past, and the better lenders understand the difference.

If a lender has the appetite but wants a little more comfort, the deposit is usually where they find it.

Rather than declining, they may ask for a larger contribution. Twenty per cent where a stronger profile might have put down ten, or a straightforward cash deposit where another business might have been able to put down the VAT only.

A VAT-only deposit means the business pays the VAT element of the purchase up front and finances the rest, which is useful if the company is VAT registered and will be reclaiming it. It is not always available here, so it is worth going in prepared to put more down.

Whichever route the deal takes, tell your supervisor what you are doing.

If there is a personal guarantee, you need their written agreement before you sign, and going ahead without it would breach the arrangement. If there is no guarantee, you may not need their permission, but your own arrangement can carry restrictions beyond the standard terms, particularly around business activity, and your supervisor is the only person who can tell you what yours actually says.

A breached arrangement is a serious thing. The cost of an email is nothing against it.

We are a credit broker, not insolvency advisers. On anything to do with the terms of your arrangement, your supervisor is the right person to ask, and we would rather you asked them first.

Everything on this page is really about asset finance, which is the industry's term for borrowing secured against a piece of equipment the business is buying or already owns. A van on hire purchase is one kind of asset finance. The rules do not change with the asset.

So if your company needs a lorry, a trailer, plant, machinery or equipment rather than a van, the position is the same. The company borrows in its own name, the lender's security is the thing being financed, your personal credit is still reviewed, and the guarantee question still decides whether your supervisor has to agree in writing first.

We arrange van finance through this site, and the business behind it, First Oak Capital, covers the rest.

An IVA is one of several things that can sit on a director's file. If your situation is broader than this, or you are not sure which of it applies to you, our main page on van finance with bad credit covers the wider picture and the specialist lenders we work with.

This is about an existing limited company, already trading, that wants to finance a vehicle, where a director is in an IVA personally or has recently completed one.

It is not about whether someone in an IVA should set up a company, and it is not about anyone's position as a director. Those are questions for an insolvency professional rather than a finance broker.

Speak to a specialist

If your company is trading well, there is a conversation worth having. Tell us where the business is now and where you are in your arrangement, and we will tell you honestly what is achievable.