New Shoots Just starting out? What do I need?

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Introduction

If you are about to start a new business or have recently done so, you may find this section useful. It has been written specially for you.

AN INTRODUCTION TO COMPANY VANS

You may have recently started or are about to start a new business.

With the capital costs of commercial vehicles so high, many may require some method of funding whether by contract hire, lease or hire purchase, spreading the costs over the useful life of the vehicle.

The first barrier to overcome is the attitude of the vehicle funders in the market, most of who are owned by the major banks. Practically all of them have a rule whereby they only accept proposals from businesses trading for more than three years. In reality most will ignore the rule but will beef up the terms, usually by increasing the advance rental or deposit paid.

Many funders also used to take a director’s guarantee to support a limited company. However, legal challenges have reduced the effectiveness of such guarantees with the result that the practice has all but died out especially amongst the larger funders.

It is fair to say that although we see occasionally 3 rentals in advance for contract hire or 10% deposit for hire purchase agreements for new start businesses, the standard tends to be 6 rentals in advance or 20% deposit.

Even so, for a funder to circumvent one of its rules it must still have a good reason to do so. In the knowledge that 80% of new enterprises fail in the first year, the funders require a reasonable amount of information prior to acceptance of the proposal.

So, what are you expected to provide.

Basic information:

• Company/Business name
• Legal standing ie limited company, partnership, sole trader etc
• If limited company then registered number
• Trading address
• Bankers sort code number and account number
• Name, date of birth and current address of directors/partners/sole trader (previous addresses if less than 3 years)
• Proof of identity of directors/partners/sole trader in the form of current passport or driving licence (both parts including photograph if new type)

Additional Information:

A business plan outlining the nature and aims of the business, where the income will come from, how it will be funded, who are the directors in day to day charge and what is their experience. Also details of any contracts or trading arrangements.

If the business has been trading for several months then copies of bank statements might be requested.

Included within the plan it is expected there will be a budgeted profit and loss account showing expected future trading, opening and projected balance sheets and a future cash flow.

Again, if the business has been trading for several months then management figures showing a profit and loss account and balance sheet could also be asked for.

If by now you are going off the idea then give us a call and we will take you through it.

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All of the documents can be obtained from us in a word format, so that they can be personalised and edited to suit your company or business. This service is free of charge, on request or phone 01908 262662.