Expanding your fleet and need bus finance?

Business expansion is regarded as a good sign.

It usually indicates sound business performance to date, a strong economy and confidence on the part of the owners, that even more can be achieved if their operations were larger.

Yet talking about business expansion can also bring with it a challenge – that of trying to work out just how to finance it. In the case of a bus or coach fleet, that’s especially true but fortunately at ACF Direct we have various forms of bus finance that might be able to assist.

Your options

Before starting to look at your coach and bus finance options, we should discuss that there are possibly two other routes you could follow:

  • using your own cash reserves (if you have sufficient liquid funds);
  • looking for a bank loan.

Only you know your exact position in terms of liquid capital reserves. Even if you are relatively “cash rich”, remember that buying your coaches and buses outright might not be the best approach from an accounting viewpoint.

Some of the options we’ll touch on below may offer taxation and accounting advantages that an outright purchase might preclude. It’s also advisable to take into consideration what’s called the “opportunity cost” – that’s essentially the hidden costs of not being able to use that cash for other purposes should you need to.

Bank loans are another theoretical option but yet again, this is effectively a cash purchase and the same accounting and asset depreciation issues apply.

Approval of larger bank loans can be slow at times and the checks on the nature of your business might be extensive and demanding.

Financing options

There are several bus finance options that will give you immediate access to the vehicle(s) you require but without using your own cash reserves or needing to purchase anything at all.

They are:

  • hire purchase;
  • operating leases;
  • finance leases.

Hire Purchase (HP) is very familiar to most of us. Its characteristics have more than stood the test of time and they typically involve:

  • you make a contribution to the overall cost (perhaps 10%);
  • the funds provider purchases the vehicle and becomes the legal owner;
  • they grant you permission to immediately use the vehicle, usually under the legal basis of “registered keeper”;
  • you pay the funds providers an agreed monthly amount over a specified period of time;
  • when you make your last payment, the vehicle legally becomes yours.

In the case of finance and operating leases, these are, at face value, very similar products:

  • you will hire or lease the vehicle from the funds provider;
  • the main difference between the two is that with an operating lease you’re effectively keeping the bus or coach off of your balance sheet – which may or may not be an accounting advantage subject to the overall position of your company;
  • leasing options may offer the choice of purchasing or returning the vehicle at the end of the leasing period.


Each of the bus finance options above has its own advantages and issues to be considered.

It’s therefore impossible to say which might be the most suitable for your situation. To do so would require a brief discussion of your unique business circumstances.

So, to allow us to help further, why not contact us for an entirely informal and non-committal initial discussion?