Before working in finance my eyes were opened to the complexity involved with business premises…
When arranging finance for the fitout of your business premises there are several Fitout Finance traps to avoid.
Fitout Finance is complex and specialised.
It is easy to make expensive mistakes, or if the Financier is not experienced in the field, waste an enormous amount of time and resources.
To help make the process easy download our free eBook – The Fitout Finance Handbook
Common Fitout Finance traps to avoid include:
Fitout Finance Trap No. 1 - The Headline Interest Rate!
Like most things in life, if it sounds too good to be true, caution is required!
Fitout Finance Trap No. 2 - Not Aligned to Cashflow!
Fitout Finance Trap No. 3 - The Deposit
When you contract someone to undertake the fitout of your business premises, you will normally be asked to place a deposit.
Depending on the size of the fitout the amount involved can be significant which can place a strain on cashflow.
However to avoid this, you can arrange for the deposit to be reimbursed as part of the finance package.
Fitout Finance Trap No. 4 - The Wrong Product
Quickly signing up to finance to get the process underway and not ensuring you are using the right product, is another Fitout Finance trap to avoid!
Choosing the right product is important from an ownership and critically, a tax perspective.
Also, you may find that if you choose the wrong product, you cannot claim back the GST.
Fitout Finance Trap No. 5 - Supplier Finance
Accessing our panel of specialist Fitout Financiers, provides a separation between you and the supplier.
We can also drive more attractive rates and conditions by leveraging the competitive tension that exists between the Financiers
Fitout Finance Trap No. 6 - Approaching Existing Lenders
Fitout and Asset Finance provide business owners with the opportunity to build relationships and a track record external to their existing primary Financiers.
Being over exposed to your primary Financier, (having “all your eggs in one basket”), is another Fitout Finance Trap to avoid.
Building external finance relationships can provide a “safety net” or fallback position if your primary Lender does not deliver.
Importantly, it can also avoid linking security that may be held by the primary Financier, to the Fitout Finance.