Every year, more and more people are choosing to start businesses. In fact, in 2014, a staggering 581,000 companies were registered. Each year, that number continues to go up.
Owning a business provides a number of benefits including funding your retirement. Not only can you pursue something that you are passionate about but you can also set your own schedule and manage your own goals and expectations. The actual process of starting a business, however, requires a lot of careful thought and consideration.
One aspect that needs to be considered from the start is what type of company vehicle you will drive. It is important to drive a new vehicle that will make a good first impression on potential customers and clients. Showing up in a high-end car like a Mercedes will definitely make a much better impression than showing up in a beat-up old car that barely runs. Fortunately, many great companies lease exclusive yet affordable vehicles that can be the perfect fit for your company. At Swiss Vans you’ll find a variety of vans at the best monthly prices. They also offer several finance deals and offers!
Creating a strong first impression with potential customers can make it easier to convert them into buyers. At the same time, however, most startup businesses don’t have enough cash on hand to purchase a luxury vehicle outright. Leasing a vehicle is a great way to get around this problem.
Understanding How Vehicle Leasing Can Benefit Your Startup Business
Leasing a vehicle for your business allows you to drive a brand-new car without the huge initial expense of buying one outright. Because leased vehicles are usually covered under warranty the entire time you lease them, you also don’t have to worry about ongoing costs for maintaining or servicing the vehicle.
Typically, when you sign a lease agreement, you will be required to pay an initial deposit. After that, maintaining the lease is simply a matter of keeping up with your monthly payments. Most lease terms range anywhere from 2 to 4 years, although you can find shorter and longer leases as well. At the end of the lease, the car is returned to the company that you lease it from.
From a tax standpoint, your business may be able to benefit from leasing a vehicle rather than buying one. Talk to your accountant about how vehicle leasing could affect your tax obligations according to VATGlobal.
Compare Your Options Before Committing
One of the challenges that most startup companies face is getting approved for financing. Banks are hesitant to work with brand-new businesses, simply because they don’t have a track record of success. Although it is usually easier to qualify for a lease, you still may face some obstacles if your business doesn’t have a solid financial history.
You can improve your chances of getting approved by preparing ahead of time. Putting together documentation about your company’s finances can help make getting approved for a lease agreement easier.
Be sure to have all of the following documents ready in case the leasing company wants to see them:
* Your company’s balance sheet
* Proof that your business is active and that it is making money
* A copy of your credit history and a personal guarantee that you will keep up with your payments
As a startup business, you will generally need to provide the following documentation, as well:
* A minimum of three months’ worth of your company’s accounting information
* A guarantee from the owner or director of the business stating that the lease terms will be followed to the letter
The other thing is to consider the car and make sure it’s right for your needs. With all the disruption in the auto industry, it’s important to make a wise decision.
Leasing companies may also consider the following:
* Prior business experience. If you have owned another company in the past, they may want to take a closer look at how successful that business was and how well you followed through on your obligations with that company.
* The initial amount of money that was invested in your business.
Just remember, there are no guarantees when getting approved for financing. Many leasing companies are simply unwilling to work with startup businesses. Fortunately, there are some companies out there that are more open-minded. You just need to keep looking until you find a company that is willing to take a risk on your business.
You should also read the fine print of the lease carefully, making sure that you fully understand what happens if you terminate the agreement early. Only lease a vehicle if you are 100% confident that you can keep up with the payments. If you fall behind, it can negatively impact your credit history and your company’s reputation. Make sure the lease terms provide affordable monthly payments that won’t stretch your budget too far.