Funding options for office interiors

Capital and human resource forms the most important source for all businesses. Office interiors will always be heavy on services – network infrastructure including electrical equipment, servers, software, other fixed furniture like partitions and hard furniture such as workstations, conference tables etc. Any deployment of capital should meet the ‘ROE’ math for businesses, which is the ultimate objective for any business to succeed. Considering this viewpoint, Arrivae takes a look at the available office funding options to make life easy.

  1. Business loan: Businesses can take a secured or unsecured loan to fund office interiors. The factors to be kept in mind to avail this facility from banks or NBFCs are their credit profile, banking relations and the financial strength of the business to support the loan.
  2. Landlord financing: Companies facing liquidity crunch can sit across the negotiation table and ask the landlord to provide completely furnished units at (X+Y) rental per month, X being the fixed rent for the real estate and Y being the rent for the furniture that will be paid over a period of 3-5 years. As long as the landlord is cash rich, this is a win-win solution as the landlord gets his yield and the business gets the funding solution.
  3. Third-party leasing: Companies like OPC Asset Solutions and Connect Residuary as well as traditional funders like Tata Capital provide furniture, equipments, laptops as well as software and hardware on lease to businesses. These lessors will own the assets that the business wants them to procure for them and lease it out to the business for a period of 3 – 5 years. The business owner can then pay the terminal value at the end of the tenor or renew the lease. The security required for this option may include bank guarantee or property mortgage to cover the lessor’s risks.
  4. Short-term rental furniture: This is a short term fix for office owners to get their furniture in place by paying a monthly rental to rental furniture companies like Rentomojo & Furlenco. The only disadvantage of this option is that you will be restricted to the catalogue options owned by these companies unlike the above flexible alternatives.

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Edited by Relin Hedly

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