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Six CNG trucks funded for a business that was still making a loss
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CASE / 03 / Transport and logistics

Six CNG trucks funded for a business that was still making a loss

The accounts said no. The contracts, the fuel maths and the fleet plan said otherwise.

Asset
6 x CNG gas trucks
Value
£680,000
Term
5 years, hire purchase
Deposit
10%, VAT deferred 3 months

UK haulage operator

A haulier needed six more compressed natural gas trucks to service growing contracts, while carrying a loss on the last set of accounts. We funded all six over five years with VAT deferred for three months.

The background

Growth and profit do not always arrive in the same year. This operator was winning work faster than the accounts could show it, and the last filed set carried a loss.

The fleet plan was sound. Compressed natural gas was already running alongside diesel on their existing trucks, so the fuel cost per mile was not a projection, it was history they could show us.

The problem

A loss on the most recent accounts closed the door with mainstream lenders before the conversation started.

Six trucks at once is a significant order, and drip feeding the order would have delayed contracts already awarded.

The VAT alone on a £680,000 order would have hit cash flow weeks before the trucks earned a penny.

How we looked at it

We built the proposal around the fuel data from the existing gas fleet, so the cost per mile argument was evidenced rather than claimed.

We set out the contracted revenue the six trucks were being bought to service, and how quickly they would be earning after delivery.

We were straight with the funder about the loss and explained what sat behind it, which is a far better position than hoping it goes unnoticed.

The funding solution

Hire purchase over five years across all six vehicles, so the operator owns the assets at the end of the term.

A 10% deposit, keeping the initial outlay proportionate to the size of the order.

All VAT deferred for three months, giving the trucks time to start generating revenue before that payment landed.

The outcome

All six trucks entered service together and went straight onto contracted work.

The fuel saving against the equivalent diesel units started from day one, which supported the turnaround the accounts had not yet caught up with.

The operator now has a repayment record with a funder that understands the fleet, which makes the next expansion a shorter conversation.

What we funded

  • 6 x CNG gas tractor units
  • Delivery and plating
  • Deferred VAT facility

Structure: Hire purchase, 5 years, 10% deposit, VAT deferred 3 months

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FAQs

Funding questions on this project

The questions businesses ask most often when they are looking at this kind of project.

Can a business that made a loss still get truck finance?

It is possible where there is a clear explanation and evidence behind the numbers. This operator carried a loss on the most recent filed accounts and still funded six CNG trucks at £680,000, because the proposal set out the contracted revenue the vehicles were bought to service and the fuel data from the existing gas fleet.

Can VAT be deferred on a large truck order?

Yes, deferral is common on commercial vehicle deals. On this £680,000 order the VAT was deferred for three months, which gave the trucks time to start earning before that payment landed rather than taking the hit weeks ahead of delivery.

What deposit is typical for HGV hire purchase?

Ten to twenty percent is the usual range, with the exact figure driven by the age of the vehicles, the term and the strength of the business. This fleet was agreed at ten percent across all six units.

How long can HGVs be financed over?

Five years is standard for new tractor units on hire purchase, which is what was used here. Longer terms reduce the monthly cost but need to sit within the working life and expected resale point of the vehicles.

Can a whole fleet be funded in one go rather than vehicle by vehicle?

Yes, and it usually works better. Funding six trucks under one facility meant they all entered service together on contracted work, instead of drip feeding the order and delaying revenue that had already been won.

A conversation, not an application

Tell us what you are trying to build.

Start with the project, not the paperwork. Tell us about the site, the equipment you are considering and what you want it to achieve. We come back within 24 hours with a clear view on how it could be funded, and an honest answer if it does not stack up.

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