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.
Bad credit van finance by circumstance
Lenders treat different credit problems differently. The rules are the same for vans as for cars, so these guides apply to van finance too:
| Your situation | What it means for van finance | Guide |
|---|---|---|
| Defaults | Stay on your file for six years. Older, settled defaults are viewed less harshly, but a default on previous vehicle finance can concern lenders | Defaults |
| A CCJ | Stays for six years unless paid within a month. A satisfied CCJ helps | CCJ |
| Bankruptcy | You must tell lenders you’re bankrupt if you borrow more than £500, so most finance waits until you’re discharged | Bankruptcy |
| A debt management plan | New credit can put your plan at risk. Speak to your provider first | Debt management plan |
| An IVA | You usually need your supervisor’s permission to borrow | IVA |
| Self-employed with bad credit | Strong income evidence and a deposit matter most | Self-employed |
| No credit history | A thin file, rather than a bad one. A short positive record helps quickly | No credit history |
| Benefits or Universal Credit | Some lenders consider benefit income | Benefits |
If you’re buying a van for work, see self-employed vehicle finance or business vehicle finance for the evidence lenders ask for and the VAT and tax points.
If you’ve been refused van finance
Being refused isn’t recorded on your credit file, but the hard search is. Before applying again:
- Ask the lender whether it used a credit reference agency, and which one.
- Check that agency’s report for errors or old addresses.
- Wait before reapplying, rather than making several applications close together.
- Use soft-search eligibility checks, which don’t affect your credit score.
- Strengthen the application with a larger deposit, a cheaper van or a guarantor.
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.
Can I get van finance with defaults?
Some specialist lenders will consider it, especially if the defaults are older and settled, and you’ve kept up payments since. See car finance with defaults, which applies to vans too.
Can I get van finance after bankruptcy?
Usually only after you’re discharged, because while you’re bankrupt you must tell any lender if you borrow more than £500. See car finance after bankruptcy.
Can I get bad credit van finance without a guarantor?
Often, yes. A guarantor can help, but many applicants are approved without one, especially with a deposit and clear income evidence.
Can I lease a van with bad credit?
Possibly. Leasing companies still run credit checks, and some have their own criteria. Expect to need a larger initial rental. See van leasing.
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.