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For example, buying a car outright is often not the best solution, as it takes a large chunk out of your budget that could have been used to finance other projects. Opting for a lease may therefore seem the most suitable method of financing. However, we'll see that it's not always easy to get a leasing application accepted by a finance company.
Generally speaking, you'll need to put together a solid file before the financing organisation will grant you the leased vehicle. This can be a daunting task when you're a young company whose financial results fluctuate enormously. In this article, we offer you all the information that young companies need before applying for a car lease.
The advantages of long-term leasing for young companies
La LLD has always been aimed at businesses. It enables companies to build up their fleets of electric vehicles without having to make a cash purchase and divert cash from other projects that are vital to the business. You spread the payment over time, without worrying too much about the condition of the vehicle at the end of the contract, as you will have to return it. But be careful not to neglect it too much: if the vehicle has suffered too much damage, you may be eligible for additional charges.
But as you will have realised, the advantage is mainly financial. It also means that you don't have to take out a car loan and add to your debt. Note that the monthly payments for leasing the vehicle are not shown on the balance sheet, but go under expenses. Since this investment appears as an expense on the profit and loss account, rather than on the balance sheet, you won't have to worry about depreciation. You should also be aware that no advance payment of VAT is required, and that the debt owed on the property is reduced.
However, there are not only financial advantages, there are practical ones too. When you take out a long-term leasing contract, the service is included! You don't have to worry about insurance or maintenance in the event of a problem, because it's all included! It's perfect if you don't want to have to deal with all the hassle of buying a vehicle in normal circumstances. If you'd like to find out more about what long-term leasing has to offer, check out this article, which gives you all the details:Should you buy your electric car under a leasing contract?
In any case, these are the main reasons why you should opt for full service leasing. That's why we recommend Beev! When you choose Beev, you'll benefit from personalised support and the best advice, thanks to our experts in electric vehicles.
Get a car policy with Beev!
Need a car policy for your company? Beev will provide you with a free personalised car policy for your company.
How do you put together a solid application to take out a long-term leasing contract?
First of all, you need to know that the main problem for a financing organisation is to check that the customer will be solvent. They want you to pay them for the service they provide, so they expect guarantees. If you are a company that was founded less than a year ago, it will be very complicated to be accepted for the contract in LLD without a full balance sheet.
If you're just one year old, it's difficult to get a lease agreement, because it's hard to judge your solvency on the basis of your balance sheet alone. Not to mention the fact that at such a premature stage in the life of a business, revenues can fluctuate greatly. In short, you'll need to demonstrate that your business is prosperous over the long term and in good financial health at the moment.
We therefore recommend that you take out a leasing contract when your company is two or even three years old. This reassures the leasing company about its longevity and ability to survive. After the first two years, your chances of "survival" are much higher than in the first year.
What do you need to successfully complete a full service leasing project?
Here is the list of documents requested when you apply for financing if you are a sole trader:
- GNI
- copy of residence permit if non-EU nationality
- copy of identity card or driving licence
- copy of latest tax assessment
- 2035 declaration or 2042 declaration for the liberal professions
- copy of a cheque
- simplified balance sheet for sole traders
- trades register
As a reminder: A sole proprietorship is a business run by a single person, with no legal personality. However, it may be registered in the trades register, the company register or as a liberal profession.
Documents to be sent by a legal entity
It is important to differentiate between legal entities and sole proprietorships. A sole proprietorship, as explained above, forms a single person with its creator. In the case of a legal entity(company, sole trader, administration, association)It is an entity that is totally dissociated from its creator; they are two people in their own right.
Here is the list of documents required when you apply for financing for a legal entity:
- GNI
- copy of the manager's residence permit if non-EU nationality
- latest published financial statements (Cerfa file: assets, liabilities, income statements, appendices 8 and 11)
- K Bis or trade directory for companies
- articles of association for associations
A wide range of leased models for small budgets
If you're looking to take out a leasing contract for a start-up company, Beev has just what you need! We have a wide range of electric vehicles, including many at low prices.
The solution: medium-term leasing!
If you don't meet the conditions for a long-term lease, don't worry, there are other solutions tailored to your needs! Take Medium-term leasing, for example! Visit LMD is a rental contract lasting between 1 and 24 months, renewable. For less than one month, the contract is referred to as a Short-Term Lease (LCD).
The LMD is therefore a good solution for those who want flexibility or, as in this situation, are unable to obtain a long-term hire contract. However, the LMD is more expensive than a LLD, which is normal given that you are leasing the electric vehicle for a much shorter period. The lessor also charges you for the time it takes to find a lessee for the vehicle after your rental period.
However, as with full service leasing, the longer you lease the vehicle, the lower the monthly repayments, especially if you renew the lease. Don't hesitate to ask your finance company or our experts for more information. PS: That's what they're there for 😉
Why is it easier to use a LMD rather than a LLD as a young company?
It's very simple: as the DML is considered to be a one-off form of leasing, it is not necessary to provide an accounting statement to the financing organisation offering it.
What vehicles does Beev offer in LMD?
Beev offers you a single rate. Regardless of the type of vehicle borrowed from among the following 3:
- SUV
- City
- Saloon
For these 3 categories of vehicle, we can offer you monthly payments of up to €590 for 6 months' hire and 24,000 km travelled.
We can also provide you with Peugeot e208 and e2008 vehicles on medium-term lease.
Consider leasing as a private individual!
If you absolutely must take out a long-term leasing contract, because the LMD doesn't suit your needs, or it's simply too expensive, you can always use your own vehicle. Better still, you can lease a vehicle personally! In fact, it's much easier to take out a full service lease as an individual than as a company, especially if you've only recently set up.
Is car insurance included in a long-term lease?
Absolutely! That's one of the big differences between full service leasing and full service leasing: maintenance, assistance and insurance are all included in the contract!
Here is a table detailing the main differences between the different financing methods.
| Location avec option d'achat (LOA) | Location longue durée (LLD) | Location moyenne durée (LMD) | |
|---|---|---|---|
Contribution | Not compulsory | Not compulsory | No |
Kilometric ceiling | Yes | Yes | Yes |
Option to buy back the vehicle at the end of the contract | Yes | Yes | No |
Right of withdrawal | 14 days | No | 14 days |
Insurance | At the tenant's expense | Not always included / may be payable by the tenant | Included |
Maintenance | Included depending on package | Included | Included |
Assistance | Included depending on package | Included | Included |
Restoration costs at the end of the contract | No | Yes | Yes |
In a nutshell
In short, investing as a start-up is often difficult, but not impossible! There are a number of solutions to meet the needs of many start-ups.
For more information, we've put together a guide to this topic to explore the different aspects in depth:
Read our article about :
Don't hesitate to ask our experts for more detailed information so that we can agree on the leasing package that best suits your needs!
