Navigate your options: Van-based franchises, van loans and the road to success

If you have a valid driving licence and want to be your own boss, then a Van Franchise could be a great option for you.

Navigate your options: Van-based franchises

If you have a valid driving licence and want to be your own boss, then a Van Franchise could be a great option for you; it’s a profitable sector with plenty of room for growth. Get a reputable franchise brand behind you and you’ll be on track for pole position. 

Demand for services that come to you is rising – at least that’s one good thing to come from the last two years! You can enjoy the flexibility that a Van Franchise offers, plus a dynamic and varied work life and don’t forget that you’re always actively marketing your brand; with some snazzy decals you’ll not mind the odd traffic jam!

For most van based franchise investment options, you won’t need previous industry experience but you will need organisation, planning and navigation skills in droves. Also consider where your skills are best placed to allow you to enjoy working your new van business and do your research! You are investing your hard-earned money; market research is so important when it comes choosing the right Van Franchise for you.

There are a variety of van based businesses operating across many different sectors of industry, so the options are huge. Looking at the bigger picture, it’s a great way to save on overheads as essentially your van is your office, there is no need for expensive premises, keeping profit levels realistic but be aware that a Van Franchise may involve lots of travelling, route planning, recording of mileage, maintaining your vehicle and with the need for a new van you’ll know that these don’t come cheap! Consider the overall cost of starting up your new business, plus, ongoing fees and charges do and will add up so it’s crucial you’re on top of this and know what options are available to you. 

Be realistic about your financial situation; consider what you can and can’t afford. Over investing will do you no favours.

New businesses often find leasing a van is not as straight-forward as it would be for a well-established business with years of trading under their belt, so, you’ve heard of Van Loans, but how do they work? Do they apply to you? And how easy is it to get finance?

There are generally two options for new start franchisees when it comes to Van finance; Hire Purchase (HP) and Finance Lease; you may have also come across other solutions and these may be available in some circumstances….but what does it all mean? 

With regards to HP and Finance Lease, each one has its pro’s and con’s; you will decide what works best for you. The main practical difference is the VAT treatment which is a cash flow consideration. 

With HP you will usually have to pay the Purchase VAT upfront and then claim it back as a VAT registered business. This could add a significant sum to your set up costs especially if your van has any conversion or additional equipment included. 

With Finance Lease you don’t have the initial Purchase VAT to pay but do pay VAT on the rentals. However again you can claim this VAT back. 

With HP you can pay a small fee and finally own the vehicle at the end of the agreement. With Finance lease you have to go through a disposal or ownership transfer process.

Using finance for business vehicles is common practice and helps to spread the cost of the van across the period you will use it in the business. It’s possible to add in extras and conversions and it’s certainly a good idea to use a franchise industry van supply specialist as they know about the brand’s rules and requirements, making sure you comply with franchise agreement operating guidelines. 

You may find that using finance allows you to get something a little better than you might have been able to get otherwise. During the last two years it has become harder to get a van on finance especially for a new start business. Expect to have to pay larger deposits, say 20%, and to have to provide lots of supporting information. Financial projections and business plans may be needed along with a personal guarantee to your business. 

It is always worth discussing your options with an independent Advisor, someone who has no agenda with regards to selling you that nice shiny van sat on a forecourt somewhere. Plus, they can help you to check your monthly outgoings as you will want to make sure that you can honour your monthly commitments and they will be best placed to advise you on this.

Keeping your credit rating in good shape is always of benefit too as this will ensure you get the best deal when it comes to van finance. A poor credit history does not make it impossible to get finance but it may impact the type of finance that is available, as well as the interest rates you’re offered. 

It’s also worth noting that paying off your loan early, as much as it could save you monthly expenditure, that there may be no real advantage in overall cost terms.

The great news is van-based franchises span a broad range of businesses and offer a degree of freedom and opportunity to develop new skills and you get to meet new people that an office-based job simply can’t provide. Your Franchisor will always be on hand to advise and support; After all, one of the benefits of franchising, for the franchisee, is the business assistance on offer, so do listen to their advice as they can often point you in the right direction when it comes to van finance options as well Service Providers. 

2022 is as good a time as any to realise that dream of becoming your own boss and it’s a great time to be looking at a van based business, so if you’re “stuck at the lights” or need advice on how to drive your business forward contact us here at d&t.

Phil Archer
Phil Archer