Choosing the right financing option for your hospitality equipment can be a complicated process. In this post, we will explore the key differences between operating leases and finance leases. We'll also discuss why Finco Hospitality has chosen to partner with SilverChef and the benefits of their Rent-Try-Buy model.
Operating Leases vs Finance Leases
Operating Leases:
- Flexibility: Contracts can be easier to terminate, offering more flexibility.
- Off-Balance Sheet: Does not appear as a liability, which can enhance financial ratios.
- Maintenance: Generally includes maintenance and repair services.
Finance Leases:
- Ownership: Opportunity to own the asset at the end of the term.
- Tax Benefits: Possible depreciation and interest expense deductions.
- Capital Budgeting: Appears on the balance sheet, affecting financial ratios.
Why Finco Hospitality Chose SilverChef
Our partnership with SilverChef allows us to provide tailored financial solutions that go beyond traditional options. SilverChef’s reputation for reliability and financial innovation made them an obvious choice for Finco Hospitality.
The Brilliance of the Rent-Try-Buy Model
Imagine you're interested in a house. Typically, you have two options: buy it outright or rent it. SilverChef's Rent-Try-Buy (RTB) model offers a more flexible approach, akin to renting a unique kind of house.
Picture this: You can rent the house for 12 months. If you find it's too small, you can upgrade to a bigger one. If renting no longer suits you, you can buy it. If the house isn't the right fit, you can return it without complications. If you love the house but can't afford to buy it just yet, you can go on a payment plan to pay it off over two or three years. And if you're still undecided, you can renew the lease for another 12 months at a 10% discount. The icing on the cake? All these payments are tax-deductible.
Additionally, 75% of the rent paid in the first year goes toward reducing the purchase price, giving you a head start if you decide to buy.
This model provides unprecedented flexibility, enabling you to adapt to varying business needs and cash flow constraints, all while enjoying tax benefits.
Case Study: Adapting to Change in Brisbane
A cafe in Brisbane utilized the Rent-Try-Buy model through our partnership with SilverChef. This enabled them to adapt their business model in response to changing customer needs, without the financial strain of purchasing equipment outright.
Conclusion
Choosing between an operating lease and a finance lease involves considering your business’s specific needs and financial structure. Our partnership with SilverChef adds another layer of flexibility and choice, making it easier for you to optimize your operations and finance.
Ready to explore your equipment financing options? Learn more about our partnership with SilverChef today.
