Your coach finance options explained

One of the on-going challenges of running a coach company (whether one vehicle or a whole fleet) is keeping your vehicles up-to-date and running at the highest standard. In uncertain economic times, when travel is at a low point, this could be a necessary but harsh financial burden. This is where coach finance can help you set up your company for the future.

You could be looking for your first coach to launch a new travel company, be looking to expand your existing fleet or to update your existing stock to offer a better experience to your customers. Regardless, the finance marketplace is packed with coach finance options that will help you afford the changes and updates you need.

This guide will cut through the jargon and give you a simple explanation of your coach finance options:

Coach Loans

Quite simply, you can take out a loan with a lender for the full amount of a coach or a coach fleet. Depending on your requirements and credit-rating there is a wide range of different loan deals on the market. Research the best interest rates and payment terms you can get, and if this all seems to complex it is worth speaking to a broker with expertise in coach finance to help guide you to the best deals.

Operating lease

Do you need the use of a coach or a fleet, but ownership is not a requirement? This allows you use of the vehicle without taking ownership. As the coach remains in the ownership of the financer the vehicle stays off your balance sheet and monthly payments stay lower than with finance like hire purchase, because it is based on the depreciation of the vehicle and not the purchase price.)

This finance option is particularly good for businesses who want to keep costs down and have tight cash flow. Operating leases for coaches usually come with low deposit and a choice of fixed or variable interest options.

Hire purchase

If you do want ownership but have cash flow issues, hire purchase is the right finance solution to mitigate both these requirements. With this form of finance, you pay monthly instalments and take full ownership of the vehicle at the end of the agreement period. Once you’ve paid off the agreed instalments the vehicle is yours.

As you are technically hiring the vehicle during the period up to full purchase you will be covered by warranties and assurances that the vehicle will be in good working order. Interest rates and the deal you can get will be determined by your credit rating.

Finance lease

If owning the vehicle (or vehicles) is not on your agenda, then there are many flexible payment plans to hire coaches on-going. Finance lease offers flexibility over a set period, and for a small annual fee allows you to keep leasing the coach after the original agreement has expired. This is good if you don’t know how long you will need to hire a coach for.

Refinancing

As an existing coach business, you can release funds by refinancing your existing fleet to quickly improve cash flow and update your vehicle stock. A lender will purchase the vehicle from you and refinance it back to you over a set period of time, allowing you to use the cash for updating your fleet or other necessary business developments.

Refinancing offers the opportunity to adapt to changing marketing conditions, respond to financial issues and seize new business opportunities with ease.

The finance contracts on offer vary widely across different providers and deals, so take time to work out your budget, requirements, the best interest rates and payment plans to determine the right kind of coach finance for your business.