Lighting is one of the most powerful hidden weapons any business has. A well-designed lighting system upgrade can dramatically reduce utility and maintenance costs, improve property values and even improve worker productivity to help give your business a competitive edge.
With budgeting cycles and access to capital always a challenge, overcoming the financial hurdles associated with funding a lighting upgrade can be a struggle. Hubbell Lighting's Cash Flow Positive program provides flexible and easy access funding solutions for commercial lighting projects that in many cases can provide positive cash flow to your customers right away!
The benefits speak for themselves:
Lease vs. Loan
To accurately evaluate the financial implications of a lease vs. loan options consider these issues:
- Your Working Capital
- Working capital is the lifeblood of your business. A 10-25% downpayment usually required for a bank loan will require using your working capital. Additionally, banks often require you to maintain minimum balances to earn the best rates, further digging into your working capital and increasing the bank's net yield. Your Cash Flow Positive lease is 100% financing keeping your working capital … well, working.
- Soft Costs
- Design costs, installation labor, taxes, freight, software and other related soft costs are almost never considered by banks in their structure of your loan. However your lease from Cash Flow Positive will account for 100% of the project costs.
- Fixed or Variable Rates
- Banking institutions like to lend you money on a long-term basis using variable interest rates that are tied to prime, so the risk of rate increases fall on you rather than the bank. Cash Flow Positive lease rates are fixed for the term of the lease.
- Revolving Credit Lines and Credit Restrictions
- Most banks classify a loan as a revolving line of credit giving them the option of cancelling or extending your credit on an annual basis, which means resubmitting financial statements every year to keep the lights on, literally. They also restrict your future borrowing power. A Cash Flow Positive lease is a fixed long-term financing option that does not require annual qualifying and does not hinder your ability to borrow in the future.
- Blanket Liens Burden Your Business
- Bank loans often require filing a UCC for a security interest in all of your company assets including your inventory and receivables. Leasing only requires the leased equipment for security.
- Financial Disclosure
- Banks want a full financial disclosure with tedious financial statements to evaluate your creditworthiness. Most Cash Flow Positive leases require a one-page application and can usually be approved in 24-48 hours.
- Tax Benefits
- With a bank loan, you own the equipment, so your only tax deduction is for interest and depreciation over the life of the system. Lease payments may be fully deductible depending on your tax situation.
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