If you have a business within the car and van hire sector, you’ll know that setting up and continuing to run this kind of operation isn’t cheap: you will need to build and maintain a fleet of vehicles, and cash flow can often be a blocker.
Luckily, there are business finance solutions out there that fit a wide range of requirements for the car and van hire sector, whether you’re a small fleet owner or a large-scale operator. These solutions can help you spread the cost of investment in new vehicles, or release working capital from your current fleet and equipment.
Let’s take a look at the funding options available to the car and van hire sector, and discuss how they can benefit your business and help it to grow.
Asset Finance for the car and van hire industry
Asset finance is a finance option which can help your car and van hire business to grow, by allowing you to acquire both new and Used Approved vehicles without having to pay upfront. Instead of buying the vehicle straight out, you will pay a regular amount to use the asset over an agreed period, avoiding the full cost of buying outright.
Waiting until you’ve got enough cash upfront to purchase the vehicles you need can slow down your business growth, which is why asset finance can be so valuable to your business: it allows you to obtain the vehicles you need for your business without having to wait.
Finance packages that you can benefit from include:
– Hire purchase
– Lease finance
– Contract hire
A business finance broker will be able to talk through the best options for you, and explain in more detail how asset finance could benefit your car and van hire business.
Merchant Cash Advance for the car and van hire sector
A merchant cash advance is a type of business financing. Merchant cash advances are ideal for businesses which accept debit and credit card payments/use a PDQ machine.
The lender will provide the business with a cash advance which is then repaid as a percentage of its customers’ card payments using a card terminal (PDQ). The beauty of this is that the advance is repaid in line with sales: your business only pays back the advance when it receives customer card payments, which helps to manage cash flow.
Merchant cash advances are ideal for small and mid-sized vehicle hire companies. You can use your cash advance for a number of things, such as:
- Paying staff members, suppliers, contractors and other creditors without straining your business’s cash flow.
- Advertising and marketing your business.
- Expanding your business into new locations.
A key benefit of a merchant cash advance is that instead of dealing with fixed monthly repayments, you’ll repay your loan as a percentage of your debit and credit card sales. This means that your monthly payments will scale up and down based on the total amount of revenue you process each month. When business is good, you’ll pay slightly more. During a slow month, you’ll pay slightly less, limiting the effects on your business’s cash flow.
A merchant cash advance will allow you to operate and grow your car and van hire business, all without the fixed monthly repayments and other major burdens of a conventional business loan.
Other funding solutions for car and van hire businesses
Your car and van hire business may also be eligible for additional funding solutions, such as:
How a finance broker can help with funding for the vehicle hire and rental industry
If you run a car or van hire business and are thinking of applying for funding, a business finance broker will be able to help. Finance facilitators such as PMD work with over 150 lenders and can open up a number of flexible, independent and competitive funding lines to drive your business forward.
A business finance broker such as PMD will also take the hard work out of securing business finance. They will liaise with funders on your behalf to ensure the best possible terms are secured, leaving you free to focus on running your business.
If you work in the vehicle hire and rental sector and are considering business finance options, get in touch today to see how PMD can help.