Professional financial advice is essential to ensure that all available options have been identified and explored.
A formal business plan is crucial and Hawk can advise on all financial matters in relation to residential care facility development and regularly assists clients in this area. We can advise on short-term capital and long term capital requirements and helping to identify the appropriate type and source of finance needed. This may depend in part on the nature of the business and project time frame. There are several financing options available including lease rental and secured and unsecured loans.
We understand that one of the main obstacles in equipping a care facility is initial capital, which is why we offer a lease alternative. There are tax advantages in “lease rental” arrangements and we are able to advise on this option and all others.
Tax advantages
Each lease payment is a “lease rental” and you may write these off as business expenses, reducing the tax you pay. Outright purchase means you may only write off a percentage of the total cost.
Fewer depreciating assets
Leasing is known as “off-book” accounting as your company does not own the asset, therefore reducing depreciation. The “lease rental” payments are written on your profit and loss acount but don’t adversely affect your balance sheet, especially important for newer businesses. With leasing, you only need make one payment in advance and then a fixed payment each month.
100% finance on the latest equipment
Leasing allows you to have the latest technology and equipment immediately and, at the end of the lease period, to either upgrade or buy the equipment for a nominal payment. Leasing often provides you with the total cost of a project including installation, training and other associated costs.
Maintain cash-flow
You will have the peace of mind of knowing the monthly payment each month for the term of the lease – and maintenance can even be packaged as part of the lease.
Leave current credit lines unaffected
This line of credit is distinct from your other commercial lending lines. Put simply, this won’t affect your ability to borrow from your bank and it leaves valuable banking lines available for unforeseen eventualities – for when you really need them!