Fit-out-finance, also known as Hire Purchase, Finance Lease or Operating Lease, is a way to split payments over time for goods that are delivered immediately.

By many, financing is often dismissed as being:

1. Unnecessary - because the buyer does not deem themselves as needing the option as they can pay for the fit out upfront.
2. Unuseful - as buyers do not believe it can cover the whole process.
3. Costly - you will end up spending more in the long run with financing due to interest rates that build up over time.

At Glenside, we believe that financing is a worthwhile option to consider for buying your fit out. However, there are lots of misunderstandings around financing that leads some people to dismiss it as a viable option straight away. We want to set the talk around financing straight and put to rest the misconceptions listed above. 

Financing Can Cover the Whole Project

Firstly, the belief that financing for fit outs covers only the acquisition of tangible equipment i.e. Furniture, I.T Equipment & Air Conditioning (HVAC) is incorrect. Contrary to popular belief, the financing options for fit outs are much more flexible and can cover the whole project, including assets such as mezzanine floors, suspended ceilings, floor tiles, as well as all full installation and building works. Therefore, financing is extremely easy, as you really can finance your whole fit out!

Save Money in Both the Long and Short-Term

Secondly, financing can actually save you money in both the short and long term. In the short term, financing can have a positive impact on cash flow, allowing you to get your fit out underway and complete without having to save and spend the full amount instantly. This has the added benefit of allowing you to get your fit out done instantly, rather than waiting years to save up the full amount.

In the long run, financing has important tax benefits as it allows you to offset your corporation tax. This means that the amount you pay through financing will be significantly less than if you paid without finance and took the whole payment upfront.

In the long run, financing has important tax benefits as it allows you to offset the costs against your corporation tax bill. This means that the amount you pay through finance can be less than if you paid outright. For example, if you looked to fund your fit out through a finance lease it could look like this: 

Cost of Fit Out: £85,000.00

Term: 5 Years

Monthly Repayments: £1,666.67

Total to Repay: £100,000.00

Tax Write off: £19,000.00

Total cost after deductions: £81,000.00

This is a saving of £4,000.00 versus paying outright, and as a business means you do not have to commit a significant amount of working capital. 

Even if you can afford to pay for your fit out outright, we would always advise that you consider financing as an option.