Key highlights
- Capacity reflects income, commitments and truck value
- The truck acts as security, so its age and type matter
- A deposit can increase what you are able to fund
- Borrow to a repayment you can comfortably sustain
- One broker gives an indicative figure across 80+ lenders
How much a lender will advance for a light truck depends on more than the truck's price. This post breaks down the main factors so you can form a realistic picture before applying.
What drives truck borrowing capacity?
Lenders look at your business income, existing commitments, trading history and the value of the truck you want to buy. A stronger, longer-trading business with healthy cash flow can generally support a larger amount. Because each lender assesses this differently, borrowing capacity varies across the market and stays subject to lender criteria.
How does the truck affect what you borrow?
The amount advanced is tied to the asset. Lenders consider the age, type and condition of the light truck, since it acts as security. A near-new pantech or refrigerated truck may support more finance than an older, higher-kilometre unit. Some lenders also set maximum ages for the truck at the end of the term.
How do deposit and term affect borrowing?
Offering a deposit can increase what you are able to fund overall, and the term you choose affects the size of repayments. It is worth borrowing an amount that leaves comfortable cash flow rather than stretching to a ceiling. Your accountant or registered tax adviser can help you plan sensibly.
How to get an indicative borrowing figure
Simon Kendrick at Overdrive can give you an indicative sense of borrowing capacity by comparing 80-plus lenders. Request an obligation-free quote. The soft check involved has no impact on your credit score.
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