Getting van finance with a poor credit history is harder than getting car finance with one. Fewer lenders offer finance for vans and other commercial vehicles, and they often look at your business as well as your personal credit. This guide explains what lenders check and how to improve your chances.
In short
Some lenders will consider van finance for people and businesses with poor credit, but there are fewer of them than for cars, and approval isn’t certain. Expect higher rates, a bigger deposit and closer checks on your income and trading history.
Why bad credit van finance is harder to get
- Fewer lenders. Fewer lenders offer finance on commercial vehicles than on cars, and fewer still lend to applicants with poor credit.
- Business risk. For a business van, lenders look at the business’s ability to keep up payments as well as your personal history.
- Trading history. New businesses already have fewer options, and poor credit narrows them further.
What lenders look at
- Your personal credit file, even for a business application, especially if you’re a sole trader or a director of a new limited company
- Your business’s credit file, if it’s a limited company
- Income evidence, such as tax calculations, accounts or bank statements
- How long you’ve been trading, with many lenders preferring at least a year or two
- Your deposit, as a larger deposit reduces the lender’s risk
- The van itself, including its age, mileage and how easy it would be to resell
How much does it cost?
Rates for poor credit are higher, and the difference adds up on a van. See the worked examples in our bad credit car finance guide, which show how a higher APR increases the total amount payable. Always compare the total payable, not just the monthly payment.
How to improve your chances
- Check your credit reports with all three credit reference agencies and fix any errors.
- Get your paperwork ready: recent tax calculations or accounts, bank statements, ID and proof of address.
- Save a bigger deposit, or part-exchange your current van.
- Choose a cheaper or newer used van. Some lenders limit the age and mileage of vans they’ll finance.
- Use soft-search eligibility checks before making full applications.
- Consider a guarantor, if someone is willing and able to take on the risk.
Alternatives to consider
- Leasing. Some leasing companies have different criteria to lenders, though credit checks still apply. See van leasing.
- A cheaper van bought outright, avoiding interest altogether.
- Rebuilding your credit first, if the van can wait.
If you’re self-employed or have specific circumstances, our guides to car finance with an IVA, on Universal Credit and on benefits explain how lenders view them. Most of the same principles apply to vans.
Bad credit van finance FAQs
Can I get van finance as a new business with bad credit?
It’s difficult but not always impossible. Expect to need a larger deposit, strong evidence of income and possibly a guarantor. Some lenders won’t consider businesses under a year old.
Does my personal credit affect business van finance?
Usually, yes. For sole traders, your personal credit is your business credit. For limited companies, lenders often check directors’ personal credit too, especially for newer businesses.
Will a van finance application show on my credit file?
A full application usually involves a hard search, which shows on your credit file. Use soft-search eligibility checks first where you can.