For example, buying a car for cash 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. In this respect, leasing may seem the most suitable financing option. However, as we shall see, it's not always easy to get your leasing application accepted by a financing organization.
Generally speaking, you'll need to put together a solid file before the financing organization will grant you the leased vehicle. This can be a daunting task when you're a young company with fluctuating financial results. In this article, we provide you with all the information that start-ups need to know before applying for a car lease.
The advantages of long-term leasing for young companies
Leasing has always been aimed at companies. It enables companies to build up their fleet of electric vehicles without having to make a cash purchase, thereby diverting cash from other fundamental company projects. You spread the payment over time, without worrying too much about the condition of the vehicle at the end of the contract, since you'll have to return it. Be careful, however, not to neglect it too much: if the vehicle has suffered too much damage, you may be eligible for additional charges.
But as you can see, the advantage is mainly financial. It also means 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 are included in expenses. Since this investment appears as an expense on the income statement, and not on the balance sheet, you won't have to worry about depreciation. Also, you won't need to pay any VAT in advance, and you'll have less debt to service.
But it's not just the financial advantages that are important, there are practical ones too. When you take out a leasing contract, service is included! You don't have to worry about insurance, or maintenance in the event of a problem, because it's all included! Perfect if you don't want to deal with the hassle of buying a vehicle in the normal way. If you'd like to find out more about what's involved in leasing a car, take a look at this article: Should you buy your electric car under a leasing contract?
In any case, these are the main reasons why you should opt for leasing. That's why we recommend Beev! With Beev, you'll benefit from personalized support and the best advice from our electric vehicle experts.
Get a car policy with Beev!
Need a car policy for your company? Beev offers you a free personalized car policy for your company.
How do you put together a solid application for a long-term leasing contract?
First of all, you need to know that the main problem for a financing organization 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're a company founded less than a year ago, it will be very difficult to gain access to a leasing contract without a complete balance sheet.
If you're just a 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 an early stage in a company's life, revenues can fluctuate greatly. All in all, you'll need to demonstrate that your business is thriving over the long term and in good financial health right now.
That's why we recommend leasing when the company is two or even three years old. This reassures the lessor of the company's 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 leasing project?
Here is the list of documents required at the time of your financing application if you are a sole proprietorship:
- RIB
- copy of residence permit if non-EU nationality
- copy of identity card or driver's license
- copy of latest tax assessment
- 2035 declaration or 2042 for self-employed professionals
- copy of cheque
- simplified balance sheet for sole proprietorships
- trades register
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 send for 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. A legal entity (company, proprietorship, administration, association), on the other hand, 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 at the time of your financing application for a legal entity:
- RIB
- copy of 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're looking for! We have a wide range of electric vehicles, including many at low prices.
The solution: medium-term rental!
If you don't qualify for a long-term lease, don't worry: there are other solutions tailored to your needs! Take medium-term leasing, for example! LMD is a rental contract lasting between 1 and 24 months, renewable. For less than a month, it's referred to as a short-term rental contract (LCD).
The LMD is therefore a good solution for those who want flexibility or, as in this situation, can't get a leasing 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 leasing, the longer you lease the vehicle, the lower the monthly payments, 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 than a LLD as a start-up company?
It's very simple: as the LMD is considered a one-off rental, there's no need to provide a balance sheet to the financing organization 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
- Urban
- Sedan
For these 3 vehicle categories, we offer monthly payments of 590 euros for 6 months' rental and 24,000 km travelled.
We can also supply Peugeot e208s and e2008s on medium-term leases.
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 is simply too expensive, you can always use your own vehicle. Better still, you can lease a vehicle personally! In fact, it's much simpler to take out a long-term lease as an individual than as a company, especially if your company has only recently been founded.
Is car insurance included in long-term leasing?
Absolutely! That's one of the big differences between leasing and leasing: maintenance, assistance and insurance are all included in the contract!
Here you'll find a table detailing the main differences between the different financing methods.
| Lease with purchase option (LOA) | Long-term leasing (LLD) | Medium-term rental (LMD) | |
|---|---|---|---|
|
Input |
Not mandatory |
Not mandatory |
No |
|
Kilometric cap |
Yes |
Yes |
Yes |
|
Possibility of buying 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 charged to tenant |
Included |
|
Maintenance |
Included according to offer |
Included |
Included |
|
Assistance |
Included according to offer |
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 many solutions to meet the needs of many start-ups. Don't hesitate to ask our experts for more detailed information on the leasing formula best suited to your needs! If you have any questions, don't hesitate to leave them in the comments, and we'll do our best to answer them as quickly as possible.
