How Principal Business Finance Empowers Businesses to Switch to Electric Vehicles

The shift toward electric vehicles (EVs) is gathering pace – driven by a combination of environmental ambition, public policy, and evolving consumer and business expectations. Recent UK government support, including £650 million in subsidies and a new £3,750 EV purchase grant, continues to make EVs more accessible.

However, for many businesses – especially those building fleets or integrating green vehicles into their operations – the upfront cost remains a significant barrier. That’s where smart financing comes in.

What’s Fuelling Business Demand for EV Finance?

Government Incentives Heating Up the EV Market

The UK’s latest subsidy scheme — £650m in buyer support and grants of up to £3,750 is designed to encourage businesses and households to go electric. Although the eligibility criteria have caused confusion, early signs indicate a 9.1% year-on-year increase in EV registrations, despite being below top-line targets.

Simultaneously, £63m was allocated to expand charging infrastructure, upscaling EV usage and future-proofing fleet operations.

Environmental and Regulatory Forces

Ultra Low Emission Zones (ULEZ) in city centres like London, and Clean Air Zones elsewhere, are making petrol vehicles expensive to run, prompting businesses to weigh electrification more seriously. EVs offer both cost-saving potential and reduced environmental footprints.

Tax and Operational Incentives*

Electric vehicles enjoy significant tax benefits:

• 100% First Year Allowance (FYA) allows the entire cost to be offset against taxable profits in the first year

• Benefit-in-Kind (BiK) rates as low as 2% in the UK

• Exemptions from Vehicle Excise Duty and congestion charges
  These incentives reduce total lifecycle costs and support businesses upgrading their fleets ([turn0search3]).

How Principal Business Finance Makes EVs Work for Businesses

Electric vehicle financing often involves complex considerations from vehicle selection to charging infrastructure and payment structure. Principal Business Finance simplifies this through:

Access to Diverse Financing Options

We work across multiple avenues:

• Hire Purchase – Spread the cost and own the vehicle at the end.

• Finance Lease – Control usage without full ownership upfront.

• Contract Hire / Leasing – Typically maintenance-inclusive and tax-efficient.

• Infrastructure Financing – Fund installation of onsite EV charging.

• Balloon payments – Off setting a portion of the cars value to be paid at a later date helping to reduce monthly payments

By understanding your operation mileage needs, tax position, upgrade cycles we match the right partner and product to your needs.

Partnering for Sustainability

Our experience ensures access to lenders attuned to commercial EV transitions, including those offering green financing incentives and lower rates.

Streamlined Applications

We manage paperwork, liaise with underwriters, and speed decisions helping you integrate EVs into your fleet faster and with minimal disruption.

Bridging Infrastructure Gaps

Beyond vehicle finance, we support infrastructure deployment such as workplace charging stations (Grants are available via local authorities and schemes up to 75% off costs via OZEV scheme), This ensures your transition to EV is seamless.

A Hypothetical Business Scenario

Scenario: A delivery company plans to switch 10 diesel vans to EVs and install 20 workplace chargers. Total investment: £320,000.

• Vehicle Financing: Hire Purchase over 4 years

• Charging Infrastructure: OZEV grant covers 75% then Principal Business Finance Ltd can fund the remaining which reduces capital outlay

• Tax Savings*: 100% FYA allows full cost deduction in Year 1

• Operational Efficiency: EVs avoid ULEZ and congestion charges, lowering daily fleet costs

Through Principal Business Finance, this business secures tailored funding to support the whole transition not just the vehicles.

The Broader Impact: Green Growth + Resilience

• Improved Cash Flow: Pay over time rather than upfront

• Environmental Credentials: Demonstrate commitment to net-zero

• Upgradable Systems: Finance terms can match technology lifecycles

• Regulatory Advantage: Stay ahead of emission limits and charging mandates

With increasing government pressure and incentives to go green, financing EVs becomes more than optional – it’s strategic.

Conclusion

Electric vehicle financing is now about more than cars; it’s about sustainability, resilience, and future-proofing your business. Principal Business Finance Limited helps businesses navigate incentives, structure finance, and invest in electrification without financial strain.

Ready to explore an EV strategy tailored to your business? Let’s make electrification accessible and affordable. Contact us on 01604217998, email info@principalbusinessfinance.co.uk, or enquire here.

*Please note Principal Business Finance Limited is not a tax advisor and as such you should speak with a tax professional to asses your specific circumstance and tax allowances. The examples used in this article are to offer ideas of what may be available to you.  Please do you own research before signings any agreements.