A limited company is a separate person in law and a stranger to a funder until it has filed something. That is the whole of what makes company van finance different: with no accounts there is no credit history to read, so the decision falls back on the director, and the document that makes that work is a personal guarantee. Everything else, the VAT treatment, the term, the rate, follows from which of those two the funder is really lending to.
An established company is read on its filings, a new one on its director
A company with two or three years of filed accounts is underwritten on them, sometimes with management figures for the current year, and the agreement can genuinely be the company's. A company with nothing filed has no history at all, so the funder reads the director's personal credit file and asks the director to guarantee the debt. Knowing which of the two you are before you apply saves a decline: if the accounts are not filed, prepare the director's file instead.
The personal guarantee is the part to negotiate
A guarantee makes the director liable for the company's debt personally, sits outside the company's limited liability, and survives the company being dissolved. It is normal and it is not a formality. What varies between funders is whether it is capped, whether it covers fees and interest as well as instalments, and whether it can be released once accounts exist. Ask all three before signing, because after signing there is nothing to ask.
A company agreement is often not regulated credit at all
Finance taken by a limited company can fall outside regulated consumer credit, which means the fourteen-day right to withdraw, the statutory early settlement rebate and voluntary termination do not attach. What you get instead is whatever the contract says. Read the early settlement and termination clauses as carefully as the rate, because those are the terms the statute would otherwise have written for you.
Hire purchase is the usual shape, and the VAT is why
On hire purchase the company is treated as buying the van, so the VAT on the purchase price falls due at the outset and can usually be recovered subject to the company's own VAT position. On a lease or contract hire the VAT is charged on the rentals as they fall due. That is a cash-flow difference rather than a cost difference, and it is a question for the company's accountant before the paperwork rather than after.
Questions people ask about van finance for limited company
Does limited company van finance need filed accounts?
An established company is usually asked for filed accounts or management figures. A new one generally is not, because there are none, and the funder substitutes a personal guarantee from the director.
Can the guarantee be removed once accounts are filed?
Sometimes, by asking the funder to review it or by refinancing in the company's own name once there is a trading record. It is not automatic, so ask at the outset whether the funder ever releases one.
Is the van a company asset on hire purchase?
The company is treated as buying it, so it normally sits on the balance sheet, while the funder holds title until the agreement ends. On contract hire it is a rental and never the company's asset.
Can a sole trader take company van finance?
A sole trader is not a company, so the application is personal and underwritten on your own file and income. Whether the agreement is regulated depends on how the van is used: one wholly for business can fall outside consumer credit.