Guide · Something broke
Your work van is dead and the bank wants a month. What replaces it this week?
By Alex Makowski Published
A replacement van is financed as equipment: the vehicle secures the loan, so approval rests on the van and your deposits rather than two years of tax returns, and funding takes two to five business days. A rental to keep jobs moving, and a major repair if you keep the old van, are working capital — funded in one to three days on your deposit history.
In this guide
- 01Why the bank's timeline does not work here
- 02Replacement: finance the van as a van
- 03Repair and the rental: that is working capital
- 04Before you sign either
- Won't affect your credit
- Free, no obligation
- Up to $500K
01
Why the bank's timeline does not work here
An HVAC or plumbing contractor with one van down is losing a tech's whole day, every day. A bank asking for two years of statements and a month to decide is asking you to lose twenty working days to save a few points of interest. Contractors in this position describe being funded by an alternative lender in two days, and one with two vans down at once used a $40,000 line to have a replacement on the road within 48 hours.
The bank is not wrong about the price. It is wrong about the timeline, and the timeline is the whole problem.
02
Replacement: finance the van as a van
A vehicle is the easiest thing in small business to finance, because the lender can value it, title it, and recover it. That is what equipment financing is. Terms run two to six years, a down payment of 10 to 20 percent is common for newer businesses or weaker credit, and used vehicles from a dealer are fine.
It is slower than working capital by a day or two because the lender wants the purchase invoice and the VIN. It is materially cheaper. Do not fund a $35,000 van with a six-month advance because the advance was faster. Rent for three days instead.
Approval rests on the vehicle and your deposits. A contractor at fourteen months in business with $25,000 a month coming in is a normal file for a van lender and an impossible one for a bank.
Application to funded
03
Repair and the rental: that is working capital
If the old van is worth fixing — a transmission on a vehicle with years left in it — the repair is labor and parts, not an asset, and nobody finances it as equipment. A working capital loan or cash advance on your deposit history covers it, along with the rental that keeps the tech working while it is in the shop.
Decision in about a day, money in one to three business days. Amounts run half to one and a half times one month's deposits, which for most one- to three-van contractors covers a major repair and a month of rental with room to spare.
Ask for weekly payments. Contractors are paid on completion and on invoices, not daily, and a daily debit fights that.
04
Before you sign either
Get the total cost in dollars, not the monthly or the daily figure. A rate quoted alone tells you nothing about what you will pay.
If you already carry an advance, say so up front. A second one stacked on the first is where contractors get into trouble, and a van lender will find it in the statements anyway.
And once the new van is on the road, set up a line of credit while the statements look good. The next van will break on a Friday too.
Written by
Alex Makowski, Owner
Alex Makowski owns and runs Business Loans for America and has been placing funding for U.S. small businesses since 2021. Businesses he has worked with have secured $50M+ in financing across 1,200+ placements. He writes and reviews every guide on this site.
FAQ
Related questions.
- Can I finance a used van from a private seller?
- Some equipment lenders will, with a bill of sale and an inspection; many prefer a dealer. Dealer stock is faster and the lender can pay them directly, which matters when speed is the point.
- I've been in business under a year. Can I still get a van financed?
- Usually, yes. The vehicle carries most of the risk, so time-in-business matters less than it does for unsecured money. Expect a larger down payment and a shorter term, and bring six months of statements.
- Is a personal auto loan cheaper?
- Sometimes, if your personal credit is strong and the van is a standard model. It puts the debt on your personal file rather than the business, and it will not fund upfit, shelving or wrapped vehicles. Worth pricing both.
Guides
More on something broke
Food truck broke down
One vehicle is the whole business. Funding it is about the deposits before it stopped.
Oven, fryer or hood failed
A ten-year-old oven and a two-year-old one get different answers, and different money.
Mower or truck died mid-season
The dealer will finance the mower. The week you lose will not finance itself.
Gym AC went out in July
A gym's revenue is memberships that cancel in a day. The product has to be faster than churn.
Storm damage, claim pending
Run the claim and the funding in parallel. The businesses that reopen fastest never wait on one for the other.
Truck out of service
Not a rebuild. A few thousand dollars, needed in two days, from a funder who reads settlements.
Sources
- U.S. Small Business Administration — LoansFederal loan programmes, eligibility and what the SBA does and does not guarantee.
- IRS Publication 946 — How to Depreciate PropertyThe Section 179 deduction and depreciation limits, from the authority that sets them.
One application, every lender we work with
Find out what you qualify for before you need it.
Eleven questions, about two minutes. You see offers side by side and take one, or none.
- Won't affect your credit
- Free, no obligation
- Decisions usually inside 24 hours
- Up to $500K