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Assisting clients to find appropriate funding options for their potential purchases, is not always easy.

That might be a case of stating the obvious and it certainly explains why, in part, the industry is tightly (and, quite rightly) regulated by organisations such as the FCA.

If you are trying to offer such products and services to people within the domain of commercial vehicles, the challenges can be particularly tough. Fleet managers and CFOs are under intense cost-containment pressures and they will be looking for flexibility and cost-effective solutions to their funding needs.

This is where ACF Direct’s proven expertise in the provision of funding for commercial vehicles can assist.

The Options

People working through us can typically offer their clients options under three generic headings:

  • hire purchase (HP);
  • finance leasing;
  • operating leasing.

As someone who is or wishes to become professional in providing commercial vehicles funding, you may well know what all of these mean. Even so, we will quickly summarise below their main characteristics.

Hire Purchase

The simplicity of this product is one of its biggest attractions and explains its ongoing popularity with our clients.

Typically, clients simply:

  • apply for the finance including specifying how much of a contribution by way of a deposit they will be making;
  • the application will then be reviewed in terms of their company’s ability to meet the repayment schedule;
  • their company’s trading history may be checked through their accounts in order to understand the viability of their business in the past and the same projections for the future;
  • assuming all is in order, the funds provider will purchase the vehicle or vehicles concerned and will remain the legal owner of them until the client has made the final repayment at an agreed future date;
  • in the interim, the client becomes the registered keeper of the vehicles and can use them normally, with the only exception being that they are not permitted to sell them before they have become the legal owners.

Finance Leasing

In this type of product, the funding is provided and periodic payments made against it by the client.

Typically, the cost of the vehicle over its entire useful life is calculated and the repayments are based upon that. As such, it enables the asset to be added to the organisation’s asset register plus balance sheet and depreciated accordingly.

Operating Leasing

This approach means that only a part of the vehicle’s total cost and life expectancy is factored out across the repayment schedule and agreed with the end client.

In many respects this is close to simply hiring a vehicle and it typically means that the repayments each month can be taken as a legitimate business expense into the client’s profit and loss account.

Selecting An Appropriate Solution

In isolation, it is impossible to say what type of product might be optimally suited to a given client. It is necessary to understand their business, their requirements and how they wish to handle the acquisition of a commercial vehicle.

The importance of our product portfolio is its diversity meaning the avoidance of any suggestion of a “one size fits all” approach being presented to clients looking for commercial vehicles and associated finance.

If this very brief explanation of our products suggests we are the sort of company you would like to be working with, we would welcome the opportunity to discuss this further with you.