For landlords focused on growth or ready to take advantage of a timely investment, lease finance offers an efficient way to secure capital upfront. Instead of waiting for rental income to slowly accumulate, you can receive a one-time cash sum, based on future rent projections, to support your plans now. Like any funding option, lease funding involves important decisions. It’s worth exploring a few guiding questions to ensure this solution aligns with your financial vision and comfort level. Here’s what to consider before moving forward.
1. What Specific Financial Goals Am I Trying to Achieve?
First, get clear on the financial goals driving your need for funding. This clarity matters because lease funding can get you immediate access to capital, but it’s up to you to know exactly where it’s going and why. Perhaps you plan to expand your real estate portfolio, finance new projects, remodel existing properties, or leverage a special business opportunity.
Do the math on the potential returns from your investment. Will this funding contribute to measurable financial growth or other tangible results? When you have specific financial objectives mapped out, you can assess if lease funding will get you across that finish line.
2. Do I Have Consistent Occupancy and Reliable Rental Income?
Take a hard look at the reliability of your rental income stream. Lenders will want to see consistent occupancy and revenue without wild fluctuations or gaps.
Check your historical numbers to spot any instability. Also, consider your reliance on seasonal or short-term renters. If turnover is high or occupancy rises and falls with tourism seasons, that unpredictability makes lenders nervous.
They want confidence that units will stay occupied and sufficient rent money will keep flowing in to cover loan payments. The more you can demonstrate the steadiness of your past and future rental income, the better your chances of getting approved on good terms.
3. What Impact Will Lease Finance Have on My Cash Flow?
Accepting a lump sum today means setting aside a part of your future rental income for repayment. A comprehensive cash flow assessment can provide clarity on whether you can comfortably manage these payments while still handling routine property costs, maintenance, and any surprise expenses that pop up.
By taking this proactive approach, you’ll have a clearer picture of whether the financial lift from lease funding is a good match for your overall budget.
4. Am I Fully Aware Of The Lender’s Requirements?
Being clear on a lender’s expectations makes all the difference in the lease funding process. Each lender sets their own rules around documentation, eligibility, and terms, so knowing what to expect can help you prepare effectively.
Geddes often takes a more personalised route, assessing requests on a case-by-case basis. This flexibility allows them to offer solutions that align with your specific financial needs, creating a more customised experience for you.
5. How Does My Credit History Look?
A solid credit background can really help you land favourable terms, whereas a not-so-great score could limit your choices. To get ahead, grab a copy of your credit report and review it carefully. Look for any errors or spots that might need improvement. Knowing your credit status lets you tackle any problems before you make your lease finance request, setting you up for success.
5. A Final Word About Lease Finance
Examining these questions helps you make a thoughtful decision. It ensures lease finance accelerates your goals, not stresses you out. So weigh the pros and cons as they relate to you. Crunch the numbers. And if lease funding aligns with your aims, use the cash injection to start building the future you want.
Landlords, take your next step with Geddes! Get in touch with us to learn how our lease funding can give you the backing you need to pursue your goals and keep moving forward.