Car Lease via Ltd rejected - insufficient capital retained

[Wonky]

Just had a lease application for a EV via the Limited rejected due to insufficient capital being retained in the company. A little annoying as the rainy day fund is in an ISA and not the Ltd and I tend to sweep out excess capital into the SIPP on a regular basis to keep things relatively lean... but still tend to leave a low 5 figure buffer in the Ltd.

My questions is does anyone have a rough idea of the capital requirements lease companies looks for in such cases? Would be good to know rough retained capital / car value ratios for successful/failed applications of others?

Trying to decide if it's worth setting my aim a little lower to get it through or give up and set my aim a lot lower and do it personally. Many thanks in advance.

[BolshieBastard]

Just had a lease application for a EV via the Limited rejected due to insufficient capital being retained in the company. A little annoying as the rainy day fund is in an ISA and not the Ltd and I tend to sweep out excess capital into the SIPP on a regular basis to keep things relatively lean... but still tend to leave a low 5 figure buffer in the Ltd.

My questions is does anyone have a rough idea of the capital requirements lease companies looks for in such cases? Would be good to know rough retained capital / car value ratios for successful/failed applications of others?

Trying to decide if it's worth setting my aim a little lower to get it through or give up and set my aim a lot lower and do it personally. Many thanks in advance.

Why dont you ask the leasing company how much retained capital would they expect for the application to be successful? Id guess enough to cover the lease.

[northernladuk]

Can't you pay the money back to the company by way of a directors loan and try again? Once you've got the car just put it back where it came from?

Will this refusal go against you for further applications?

[Wonky]

Can't you pay the money back to the company by way of a directors loan and try again? Once you've got the car just put it back where it came from?

Will this refusal go against you for further applications?

They wanted a copy of the accounts not just bank statement .. so moving £ back in under a directors loan would just net off as a debt?

Might be some mileage in using a DL to bump the upfront payment maybe… but still might get bounced. As you say they will have run a credit check for this so I don’t plan to apply again unless there’s some assurance it will fly. Ty ..Will look into it tomorrow

[Wonky]

Why dont you ask the leasing company how much retained capital would they expect for the application to be successful? Id guess enough to cover the lease.

Yes ty ??? I had thought of this .. the issue is it’s playing Chinese whispers with the finance company via the leasing company and from experience the tend to keep tight lipped on criteria.

[yorkshirespud]

It all depends on the car, the lease company, and the balance sheet of your limited.

I have recently secured a new lease company car through https://www.1st-leasing.co.uk - an Audi Q4 etron, to be delivered in December, with no personal credit check, based on my Ltd’s most recent company accounts showing a £30K balance sheet.

I’d shop around and get in touch with 1st Leasing, and maybe reconsider your car choice maybe?

[yorkshirespud]

Forgot to add - first attempted to lease a car before preparing the latest set of accounts, and the previous year had a £10K balance sheet - that was determined to not be enough to lease a car.

[Lance]

Limited liability means that the lease company could easily lose the car. It's not like a personal lease where the lease company can get your house and pursue you for decades.
Couple that risk, with the shortage of car availability right now, why would they do it?

One option would be to rent rather than lease. Rental will cost more so the finance companies have more reason to take the risk.
Or find a lease company that charges much high APR (same reason).


Or... I dunno. Drive what you can afford? Forget this idea and just buy a £5k banger personally and charge 45p per mile. Will cost far less, save more tax, and be kinder to the planet.

[Wonky]

Forgot to add - first attempted to lease a car before preparing the latest set of accounts, and the previous year had a £10K balance sheet - that was determined to not be enough to lease a car.

Thanks - useful info. My rejected one was about 18k balance on a 50k car / 30k lease. Wondering if they'd accept a certified interim P&L and balance sheet as it would only take me a month or two to run the balance up 40k if i hold off on SIPP payments and skip a few dividends.

I'm assuming you made a full application on the first attempt with credit checks etc? Any issues running it through again afterward? Was it with the same company and how long between applications?

[Wonky]

Or... I dunno. Drive what you can afford? Forget this idea and just buy a £5k banger personally and charge 45p per mile. Will cost far less, save more tax, and be kinder to the planet.

The whole point of the query is that I can afford it quite easily, so it's more of a structuring issue than affordability - not sure how an old banger is kinder to the planet than an EV!?