Business car leasing with bad credit

Can my business lease a car with bad credit?

Even with poor credit, it is often still possible to obtain a business lease. However, the process might take longer or be more difficult. The best way to approach business car leasing with bad credit is to be open and upfront about your finances with your preferred lease company.

Why does my business need a credit check?

When applying for a business car lease you’ll be asked to provide evidence of your recent financial accounts. You might also be asked to provide bank statements to evidence incoming and outgoing payments from your business accounts.

If the information you give does not show a positive net worth or credit score, the finance company won’t have the reassurance it needs. This may lead to concerns about whether your business will be able to keep up with the monthly lease payments. As a result, they may consider you to be a high-risk applicant, meaning they will be less likely to approve your application.

What does the finance company look at on my report?

  • Companies House accounts and trading history for at least three years
  • Management accounts if certified accounts are not available.
  • Business bank statements to demonstrate your ability to pay
  • Company registration number
  • The address and employment history of the company director

Business applicants will also undergo a standard credit check. This is usually processed by Experian or Equifax.

All of the information is used to assess whether you will be able to fulfil the monthly payments for a lease car.

Depending on the nature of your business, either the directors, partners or sole trader will need to provide documents confirming their identity and proof of address. If your name is recorded on the car lease proposal form, you will be subject to a personal credit check as well as a business one. For this, you will need to provide information on the following:

  • Full name and date of birth
  • Any previous personal loans, credit card limits and mortgages
  • Electoral roll details, including any previous addresses
  • Current account overdraft limit
  • Any missed or late payments
  • Financial links to others - for example, if you have applied for joint credit with a partner or business colleague
  • History of debt problems including CCJ’s and bankruptcies during the last six years
  • Fraudulent activity linked to your identity

I’m a director with a bad credit score, can I still lease?

If your personal credit score is poor, some brokers will still be willing to support your application. This will largely depend on the status of your business credit score. If this is good, you will probably be asked to provide additional information on your personal and business finances to support your application.

If you’re a director and your individual credit file is less-than-perfect, see our guide to personal car leasing with bad credit for tailored advice.

Can I lease a fleet with bad credit?

You will undergo the same credit checks outlined above when applying to lease a fleet. The lender will consider all of the information available to them before making a decision on whether your application is approved. The overall cost of leasing an entire fleet will be higher than the monthly payments for an individual lease car, so the broker will need reassurance that you will be able to pay every month.

How to improve my company’s credit score?

At Rivervale, most of our leasing partners will only extend credit to applicants with a good credit score. We choose to work with these lenders to ensure we can continue to provide the most competitive leasing deals.

If you have a poor credit rating, it is best to improve your credit score before applying to lease a vehicle or fleet. Here are a few ways to get started:

  • Ensure your bills are paid on time. If you’re having problems, seek debt advice to avoid future CCJs (County Court Judgments).
  • Clear any existing debts
  • Register to vote
  • Check your credit file for mistakes
  • Check whether your credit file is linked to other people (e.g. your partner, family member or friend)
  • Check your credit report for fraudulent activity. Inform the credit reference agency if you find anything suspicious
  • Try not to utilise all of your available credit. For example, if you have a credit limit of £5000 on your credit card, try to keep the balance at £1250 or lower.

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