Expanding your operational space is a significant milestone, but it often comes with a hefty price tag. A Mezzanine floor installation is a superb, cost-effective option offering more office, production or storage space without the disruption and cost of relocation. However, the initial investment can still be a major hurdle that puts a roadblock in the way of quickly expanding your space.
How do you fund such a project without depleting your cash reserves or tying up valuable capital?
This is where mezzanine floor financing comes in. By opting for a lease financing agreement, you can install the mezzanine floor you need now and spread the cost overtime. It’s a strategic way to make a crucial business improvement financially manageable.
Let’s explore the key benefits of using lease financing for your mezzanine floor installation and how it can help you achieve your expansion goals.
A major upfront payment for a new mezzanine may for some businesses and organisations be considered a strain on finances. Financing allows you to keep your cash reserves free for other essential operational needs, whether that’s investing in new stock, hiring more staff, or boosting your marketing efforts. Instead of a large one-off expense, you’ll have predictable monthly payments that are easier to manage.
Leasing eliminates the need to tie up a large chunk of your working capital in a single project. This makes expansion more accessible and frees up your capital for other strategic investments that can drive growth.
One of the most compelling advantages of financing is that you can start using your new space straight away. While you pay for the mezzanine gradually, it can begin generating returns immediately. Whether it’s through increased production capacity, more storage space for stock, or housing additional office staff, financing enables your mezzanine to start contributing to your bottom line long before it’s fully paid for.
The two asset financing solutions offered through our financing partner can offer a range of potential tax advantages. A Hire-Purchase agreement businesses can claim capital allowance including Annual Investment Allowance and Full Expensing and deduct interest on instalments, offering significant tax relief on qualifying equipment. A Finance Lease agreement is typically considered as an operating expense meaning it can be 100% tax deductible from company profits significant reducing costs over the term of the lease.
With a leasing agreement, you typically pay fixed monthly sums over an agreed term. This predictability makes budgeting and financial planning much simpler. You won’t have to worry about fluctuating costs or unexpected financial strains, allowing you to plan for the future with greater confidence.
Financing your mezzanine floor through a lease agreement is separate from your existing bank credit facilities. This means you maintain your borrowing power for other projects or unforeseen cash-flow emergencies, giving your business greater financial flexibility and security.
A mezzanine project often involves more than just the structure itself. Costs for lighting, air conditioning, partitioning, carpeting, racking and shelving can add up. Many leasing agreements allow you to bundle these associated fit-out costs into one simple financing package. This means you can spread the total project cost, not just the cost of the structure, making the entire expansion more affordable.
The additional space created by a mezzanine floor is designed to boost your business's revenue, whether through higher output, increased stockholding capacity, or accommodating more staff. Leasing aligns the cost of the project with the returns it generates, effectively allowing the mezzanine to “pay for itself” over time.
Financing your mezzanine floor is a smart, strategic move that can help your business grow without the financial strain of a large upfront investment. By preserving cash flow, gaining tax advantages, and aligning costs with your ROI, you can make your expansion plans a reality.
We offer a proactive financing solution through our financing partner, PMD Business Finance. If you would like to explore this further or obtain indicative funding options, please get in touch to discuss how we can help you fund your mezzanine project.