Does your commercial space need a freshening-up, but there’s no renovation room in this year’s capital expenditure budget? No problem! Leasing your flooring – rather than an outright purchase – has a lot of advantages that are frequently overlooked. Here’s the top 7 reasons that you should consider financing your flooring renovation through a lease:
1. Leasing Protects Cash Flow
When you finance your renovations through leasing, it allows you to spread out the acquisition cost of your flooring over time, freeing up valuable capital to further grow and expand your business. Your flooring is going to last for years and years – so why should you have to roll years of service into a single lump-sum payment?
2. 100% Financing
When you borrow money from your bank to make tenant improvements, you may be asked to provide a down payment of 10 to 20%. In most cases with leasing, your first payment is all that is required at the time of signing. You can finance the total renovation, including the flooring material itself, installation, and even custom entrance matting to complete the package.
3. Operating Expense versus Capital Expenditure
Sometimes the cash to implement a tenant improvement might exist in the budget, but may not be accessible because it’s not been allocated for use for capital improvements. Leasing – rather than financing or cash purchasing – your flooring may allow you to assign the expense to your operating expenses budget instead, making your improvements possible sooner.
4. Tax Advantages
Depending on the circumstance, lease payments may be 100% tax deductible as an operating expense! Consult your accountant regarding the nature of deductions for your specific situation.
5. Simplify Budgeting
Because your regular lease payments remain fixed over the term of the lease, budgeting cash flow requirements is made easy. You know exactly what your payments will be, and for how long – no nasty surprises. And when you’re leasing your entrance mats, there’s a “finish line” to when those monthly payments end…unlike a rental mat service contract.
6. Leasing Preserves Existing Credit Lines
With lease financing, you are able to get the tenant improvement and flooring renovation you need today without tying up other valuable credit lines.
7. Leasing is Flexible
A variety of lease options are available, the term and frequency of payments can be tailored to fit your unique situation. Lease terms for most flooring work range from as short as 24 months to as long as 60 months – there’s a payment term and schedule to fit virtually every budget and need!
We can help you find the right flooring solution for your business’ needs…and help you find the right financial fit to make it happen! Get in touch with us today to discuss how we can give your office or retail space the makeover it deserves.