Commercial and finance director Christina Unsworth discusses the impacts of Covid-19 on a business, and how leasing can be an overlooked option that can provide a business with the liquidity to operate.
Cash flow is important to all businesses, and leasing provides an instant access to cash, which effectively means you are paying for your asset when you use it. Leasing options on average are for three years, meaning you pay for the refurb over the life of the lease, spreading the cash flow out as you are using the asset.
By doing this, a business can use the cash for working capital, such as paying bills, staff costs and overheads, rather than tying up the fix lump sum at the outset.
Certainty – a word businesses crave right now. Leasing will provide just that. Payments are fixed - providing certainty of monthly cash flow. During these times that’s absolutely critical.
The government have offered various facilities during the coronavirus pandemic, which can be challenging to get hold of. Leasing options are a simplistic way to attain additional funds. Requirements depend on industry statements; however, it is worth exploring directly with a leasing company to discuss your options.
Leasing can cover all aspects of the fit out - from design, build and even furniture. If you have already funded your project and are now short of cash for other requirements such as software, some leasing agents offer retrospective leasing.
Leasing is more tax efficient for businesses because monthly installments are offset against tax. The tax benefit must be ongoing and can only apply if you are paying UK corporation tax.
We have seen a wide variety of our clients use leasing options, including occupiers from small to medium enterprises, to larger corporations. Landlords also have access to leasing to, allowing them to retain cash within investments and structure cash flow to pay off the asset. With the economy in turbulent times, we’ll start to see a rise in leasing options to support businesses in the future.
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