Finance is applicable to any office interior project. This route typically offers an alternative funding route, preserving funds and existing bank facilities within your business,  and it's usually a tax-efficient method of obtaining goods as the monthly or quarterly payments are fully offset against taxable profits. If paying from your cashflow only approximately 65% is allowable for the HMRC due to the intangible element (see notes below on Capital Allowances). Leasing is far more cost effective than bank borrowing as loan payments do not attract 100% allowances.

Lease Options
Lease Rental – the most straightforward option, where the supplier is paid direct by the leasing company. This is used where the invoice amount is known and where payment is required on a specific date. This is also used in projects where the deal has been syndicated between a number of lenders.

Sale and Leaseback – used where there are a number of suppliers, or where stage payments have been requested by the main contractor. The client pays all the invoices in the usual way, and then the leasing company reimburses the client via a leasing agreement at the end of the project – all invoices must be less than 3 months old. The downside of this arrangement is the client needs to have enough cash flow to pay the invoices for a period of time prior to getting the money back.

The duration of a finance agreement is usually determined by our clients, and a 2,3,4 or 5 year term are available. This allows you to make the most of your budget by spreading the cost so that you can aquire the solution that fit your needs fully, rather than what your budget dictates. Payment is monthly, quarterley or annually whichever suits you and are fixed for the period allowing you to budget.

Flexibility
You can add to your existing lease at any point during the term. You can either extend the term and keep the payments the same, or simply increase the payments and keep the termination date the same. At the end of the lease period you have two choices whether to continue to rent the installation at a small monthly charge or negotiate ownership of the installation via a third party for a nominal charge.

Notes re Capital Allowances
Tax relief on commercial property expenditure is given in the form of Capital Allowances. Whether the expenditure relates to the capital costs of a new refurbishment, fit-out or property acquisition Capital Allowances will be available on the plant & machinery element.

The downside is that the definition of 'plant' in the context of a fit-out is extremely complicated. Items that qualify as 'plant' are actually defined by exclusion - that is to say it excludes expenditure on the provision of buildings, structures and land. Included in the expression 'buildings' are walls, floors, and mains services. Needless to say there are therefore a number of elements of a fit-out that do not qualify for Capital Allowances (including most partitions, doors, frames and skirting and lighting) as they are deemed to part of the 'building'. Deloitte and Touche have carried out a review of completed projects financed by Inchaok Office Interiors and calculated that on average 65% of a typical project (excluding furniture) would qualify for capital allowances. Generally the overall percentage will increase on projects with a significant element of mechanical and electrical work - i.e. air conditioning systems. As a rule of thumb though we work on 65% qualifying expenditure.

The allowances themselves are given on a reducing balance basis at 20% per annum, although the first £50,000 of capital expenditure in any one year is fully allowable (assuming, of course, it is considered “qualifying” by the Revenue). There are also certain instances where additional enhanced allowances can be claimed - for example on "green" lighting and air-conditioning systems. Further information is available by referring to the Inland Revenue website.

Inchoak have a consumer credit licence, No. 492737 to enable the provision of finance to clients.

Additional Notes

• On a lease rental contract VAT is payable at 17.5% of the rental.
• Valid for 1 month from date of proposal.
• Subject to formal credit approval
• Subject to status
• An administration fee is payable with the first rental (Maximum £150 + VAT per agreement)
• The terms set out above are given solely upon the understanding that they do not constitute any part of an offer or a contract, but are merely an invitation to treat.

Please note that a full list of the terms and conditions is available, if you wish information on these or have a specific query re our finance options then please speak to the Inchoak sales team on 01634 720888