Cash flow is a crucial aspect for all businesses, and using lease finance for an office fit-out provides a valuable solution by giving instant access to cash. This blog post will explore five reasons why lease finance can benefit businesses looking to free up capital to move or refurbish their office space. Lease finance improves cash flow, provides turnkey funding, maximises tax efficiency, and is widely applicable to various clients.
Reason to use lease finance for an office fit-out
1 Retain cash for business growth
Leasing no longer requires large up-front payments, enabling businesses to hold onto their cash and utilise it for working capital. This flexibility allows companies to invest their money in revenue- generating activities, such as paying bills, staff costs, and overheads, rather than tying it up in a lump-sum payment to finance their fit-out.
2 Accurate budgeting and forecasting
Fixed lease payments make budgeting simpler and eliminate unexpected variations in interest rates. With fixed monthly payments for the duration of the lease, businesses can effectively plan their cash flow and accurately forecast their financial commitments.
3 Pay for assets as you use them
Lease finance options offer flexibility by aligning the lease duration with the usage of the asset. This means businesses can pay for the asset over the course of its use, which is particularly beneficial for fit-out projects. Mirroring the lease finance for an office fit-out to the office lease or lease break-point provides cost efficiency and cash flow management.
4 Tax benefits
Lease rental payments are 100% tax allowable against taxable profit, making leasing the most tax-efficient method of financing a fit-out. By taking advantage of these tax benefits, businesses can optimise their cash flow and investment opportunities.
5 Unaffected bank credit facilities
Lease finance does not impact existing bank credit facilities, leaving businesses with their credit rating intact. This enables businesses to explore other avenues for growth and development while leveraging leasing as a financing option.
Lease finance is a powerful tool for your business
Lease finance is a powerful tool for businesses, offering immediate access to cash, enhancing cash flow, and providing certainty in uncertain times. With the ability to retain working capital, accurate budgeting, flexibility in payment terms, tax efficiency, and the wide applicability of leasing options, businesses can leverage lease finance to support their growth and overcome financial challenges.
Whether it’s small to medium enterprises or larger corporations, lease finance offers a simple and effective solution for various clients. In times of economic turbulence, lease finance will become an increasingly valuable option to support businesses in the future.
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