How Furniture leasing could be the answer to retaining working capital with rising mortgage interest rates
The Bank of England Base Rate is currently at 2.25% and for property developers and investors, this may be affecting cashflow. If you have a buy to let mortgage on a variable rate, your monthly repayments will be increasing.
With cash flow tighter, you may find yourself with less working capital for your next project or struggling to complete your furnished property to a high quality. However, leasing finance could be the answer.
Relieving Cash Flow Pressures from Rising Interest Rates
If you’re experiencing cashflow pressures from rising interest rates or increasing prices on materials and supplies, leasing furniture can ease any pressures that you’re experiencing.
As lease finance will allow you to spread the costs over a specific period of time, you won’t be faced with a large outgoing one month or delays in progress whilst you source further funding from elsewhere.
Your Deposit for Your Next Project
One way that investors and developers are utilising leasing finance is by leasing furniture. Furniture leasing allows you to make affordable monthly payments, take advantage of tax benefits and retain capital.
If you have furnished accommodation such as an Air BnB, HMO, Serviced Accommodation or furnished buy to let property, you may have purchased all the furniture that you need in one go. This may have cost you thousands in one go but with leasing finance, you can opt to pay for the furniture in monthly affordable repayments.
By paying monthly, you’re retaining working capital which you could use as a deposit for your next project or make improvements to any existing properties.
Buy Cheap and Buy Twice
In a cost saving activity, you may be looking at ways that you could cut down on costs and preserve cash flow. One option is to purchase cheaper furniture but as the famous saying goes, you may end up buying twice and spending more money in the long run.
Additionally, if you were to purchase cheaper furniture, it might not end up being the high end finish that you’re looking for. As a result, you may need to put your property on the market for a lower amount.
What types of items are available on a lease?
- Sofa and chairs
- Dining tables, coffee tables, bedside tables and desks
- Decorative items such as mirrors, lamps, artwork
How do I apply for furniture finance?
You can either go to a supplier, collect a price for everything you need and then speak to us about your finance options. Alternatively, if you have already purchased all furniture, we can potentially look at financing your furniture up to 6 months after your purchase.
To apply for furniture finance, you will need to be a limited business or LLP and have a minimum order of £2,000.
Example of Finance:
Amount of leasing finance required: £7,500
Monthly repayments: £267.72
Total repaid: £9,638
Total Interest Paid: £2,138
Corporation Tax Relief: £1,831
Net cost of Finance: £307
If you have a figure in mind and would like to find out how much your monthly repayment figures are, use Amplo’s Leasing finance calculator.
All figures excluding VAT and the figures presented are for guidelines purposes and the final lease amount will be determined by the lender’s underwriter.
Contact Amplo Commercial about Leasing Finance
If you’re looking to apply for furniture leasing finance or would like to find out more information, don’t hesitate to get in touch with our specialists – we’re happy to have a no-obligation discussion.
Call us on 01270 443510 or complete our enquiry form and we’ll be in touch as soon as possible. If you’re looking for a different finance solution such as bridging loan, mezzanine finance or asset finance, as we’re a brokerage we can arrange a full suite of finance solutions.