5 reasons why your business may not qualify for a traditional car lease

January 24, 2023

Traditional Car Leasing

Rather than purchasing or financing a vehicle, traditional car leasing can be a cost-effective way to run one or more vehicles for your business. But you may find that the company declines you, here are five reasons your business may not qualify:

New Business Startup

With no trading history or filed accounts, there isn’t much for the car leasing companies to look at. Some of the larger funders expect to see 2-years worth of positive accounts which can be a long-time to wait to obtain some vehicles.

Low Net Worth

Many of the car leasing funders will not lease any vehicles which are higher than the companies net worth or shareholder funds. There are usually explanations for this including dividend payments or investments, but a low figure will put you into the category of risky.

Poor Personal Credit

Both negative business and personal credit history can have a determental affect on your application with many of the car leasing funders. Even if the company credit rating is strong, the history of the Directors can play a huge part in the decision. Often funders will look at previous business failures, inconsistent address history, etc.

Credit Limit Capacity

Like with many of the car leasing funders, your business will be given a credit limit. Once you reach this limit, the funder will be reluctant to allow any additional vehicles to go out. This can have a big affect on your business if you are trying to grow and need more vehicles to allow this.

Covid Loans

We’ve touched on the Covid Loans situation before, but we are hearing from more and more clients who have been refused credit due to taking one of the governments bounce back loans or covid interuption loans. Even if the company didn’t actually need to use the facility.

We can help

If your business has been turned down for finance or vehicle leasing recently and you need an option, we have a number of short-term solutions to help.

These include our hugely popular car subscription program giving you access to a wide range of physical stock premium vehicles that can be delivered quickly. We also offer short-term leasing contracts on a range of contract lengths with our most popular being 6-month car leases or 12-month car leases.

If you’d like more information on how we can help, please contact the Cocoon Vehicles on 01332 290173 or use the ENQUIRY FORM at the bottom of this article.

You can also find out more information on our New Startup Business page, just click the highlighted link.

There are so many circumstances where you may need that flexible vehicle, just call the team on 0330 330 9425 to see how we can help you!

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