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A good work van is more than a vehicle. It is your tool room, your delivery truck and your moving billboard. If you are asking "how do I finance a work van or commercial vehicle for my business?", you are in the right place. This guide walks you through the steps in plain words, compares new and used, and lists what to ask before you sign. It is written for small business owners such as tradespeople, delivery businesses, cleaners and caterers.
What is work van financing, in plain words?
Work van financing is a way to pay for a van or other commercial vehicle over time instead of all at once. The vehicle itself often helps secure the money, which means the lender may be able to take it back if payments are not made. You use it for work every day while you pay it off.
You can also lease a vehicle instead of buying. We explain the difference in our guide on equipment financing vs. leasing.
How do I finance a work van for my business? Step by step
- Decide what you really need. Think about the size, the load you carry, the shelves or racks you want and how many kilometres you drive. A van that is too big or too small costs you money every week.
- Choose new or used. See the next section.
- Set a budget you are comfortable with. Think about the payments, plus fuel, insurance, upkeep and the time the van may be off the road.
- Get a written quote. Ask the dealer or seller for the full price in writing, including any extras such as shelving or lettering.
- Gather your paperwork. Our business loan documents checklist shows what lenders often ask for. Recent bank statements are usually near the top.
- Compare two or three offers. Ask each one for the total you will repay, not just the payment. Our scorecard for comparing offers helps.
- Read everything before you sign. Ask what happens if you want to pay early or miss a payment.
- Sort out insurance and registration. Rules for commercial vehicles differ by province, so check with your insurer and your provincial vehicle office.
Should I buy a new or a used van?
Neither is always better. Here is how to think about it.
A new van
- Often comes with a warranty
- May have fewer repairs early on
- Usually costs more up front
A used van
- Often costs less to buy
- May need more repairs sooner
- Can be harder to finance if it is very old or has high kilometres
Some lenders have rules about age and kilometres on used vehicles, so ask before you fall in love with a van. Our guide on new vs. used equipment financing goes deeper. If you run a bigger fleet or a heavier truck, see commercial truck and fleet financing and our trucking and transportation financing page.
Example only: A plumber's old van keeps breaking down. He needs a more reliable one, but cannot afford to be without a vehicle for long. He compares a newer van and a used one, asks each seller for a written quote, and checks what each financing offer would cost in total. He picks the option that fits his monthly money best. Your situation will be different.
Should I lease or buy?
- Buying (with financing) means you end up owning the van. It suits owners who keep vehicles a long time.
- Leasing may mean smaller payments and an easier time swapping to a newer van, but you do not own it unless you buy it at the end.
Read our guide on the end-of-lease choices in $1 buyout vs. fair market value leases.
What do lenders usually look at?
Every lender is different, but these things come up often:
- How long your business has been running
- Your bank statements and regular income
- The van itself: new or used, age and kilometres
- A written quote from the seller
- Your credit history
Nobody can promise approval before looking at your details. Be careful with anyone who does.
Can I finance the shelving and extras?
Sometimes. Racks, shelving, lettering and tools may be added to the cost, but this depends on the lender. Ask early, and make sure the quote lists each item. Our guide on what equipment qualifies for financing gives a wider picture.
How may a work vehicle affect my taxes?
Rules for deducting vehicle costs can be detailed. Speak with an accountant about your own situation. Our guide on the CCA deduction for equipment is a helpful starting point for understanding the idea.
Common mistakes to avoid
- Choosing by payment only. Look at the total you will repay and the full running cost.
- Buying a van that is too big or too small for the work.
- Skipping the written quote, especially for extras.
- Not checking the age or kilometre rules of a used van before you commit.
- Forgetting insurance. Commercial insurance can cost more than personal insurance.
- Taking the first offer. Compare a few.
Ready for the next step?
If you need a van for your business and want to see what could fit, you can book a short call with our team. Tell us what you do and which vehicle you have in mind, and we will talk through your options in plain words. You can also learn about equipment financing, see how lendflo works, or read our contractor financing guide.
This post is general information to help you understand your options. It is not personal financial, legal or tax advice. Details, rates and rules can change, so check the latest information before you decide.
