Can I get van finance as a sole trader?

Yes. Sole traders are underwritten personally, using SA302 tax calculations and bank statements to evidence net profit rather than turnover. Two years of figures opens the widest panel, though one year is often workable with a deposit.

Can I reclaim VAT on van finance?

If you are VAT-registered and the van is used wholly for business, VAT on the purchase can normally be reclaimed, and on lease agreements the reclaim typically applies to the rental payments. The rules are far more generous for vans than for cars, but confirm your position with your accountant.

What is the difference between van hire purchase and contract hire?

Hire purchase leads to ownership once all payments and the option-to-purchase fee are made. Contract hire is rental: you hand the van back at the end, with mileage and condition terms, and never own it.

Can I get van finance with bad credit?

Often yes, particularly where the van is a working asset generating the income that services the agreement. Expect a higher APR, and expect a deposit or a personal guarantee to carry significant weight in the decision.

Can I finance a van for personal use?

Yes. A van bought for private use is financed on a regulated consumer agreement in the same way as a car, which is common for campervan conversions. You lose the business VAT and tax advantages in that case.

Commercial vehicles

Van finance

Financing a van is a business decision as much as a credit one. The agreement type changes your VAT position, your tax relief and whether the van ends up on your balance sheet, so the right product matters as much as the rate.

Written and reviewed by Phil Kehoe, Director, Motoring Today · methodology in our editorial standards.

The products
VAT & tax
Who qualifies
Check eligibility
FAQs

Which agreement suits you

Ownership, tax treatment and monthly cost all move together.

Product	You own it?	Best for
Hire purchase	Yes, at the end	High-mileage operators who keep vans long term.
Lease purchase	Yes, after a balloon	Lower monthlies where a final lump sum is manageable.
Contract hire	No, you hand it back	Fixed-cost fleets that replace vans every few years.
Finance lease	No, but you carry the risk	VAT-registered businesses wanting to reclaim on rentals.

VAT and tax treatment

Vans are treated far more generously than cars. A VAT-registered business using a van wholly for business can normally reclaim the VAT on purchase, and on lease rentals the reclaim is typically available on the rental payments instead. Cars are heavily restricted here; commercial vehicles are not.

Capital allowances also differ, and the benefit-in-kind position for an employee with private use of a van is calculated on a flat rate rather than on CO₂ emissions. Which product is cheapest after tax depends on your VAT status and profit level, so it is worth an accountant's five minutes before you sign.

Sole traders, companies and personal buyers

Sole traders are underwritten personally, on net profit from SA302 tax calculations rather than turnover.

Limited companies are underwritten on filed accounts, often with a director's personal guarantee where the company is young.

Personal buyers can finance a van on a regulated consumer agreement in exactly the same way as a car. That is common for campervan conversions and private use.

New businesses without a trading history are not shut out, but expect a deposit and a personal guarantee to be part of the conversation.

Check what your business could borrow

Soft search

Check van finance eligibility without a credit footprint

A soft search shows which lenders would consider you and an indicative rate. It is visible only to you, and there is no obligation to proceed.

Check my eligibility

Model the monthly cost. Adjust the deposit, term and APR to see what a van at your budget actually costs.

Open the calculator

Representative example11.9% APR representative

Cash price: £18,000
Deposit (advance payment): £1,800
Total amount of credit: £16,200
Duration of agreement: 48 months
Rate of interest (fixed): 11.3% p.a.
Monthly repayment: £421.03 × 48
Total charge for credit (interest): £4,009.44
Total amount payable: £22,009.44

Motoring Today is a credit broker, not a lender. Motoring Today is a trading style of Motor Genius Group Ltd (FRN 960504), an appointed representative of The Compliance Guys Ltd, which is authorised and regulated by the Financial Conduct Authority (FRN 941360). Finance is subject to status and approval; rates depend on your circumstances and the lender. Available to permanent UK residents aged 18+. Example figures only — not a quote.

Frequently asked questions

The questions buyers ask us most on this topic.