Is your business expanding? Are you thinking about leasing a business premises? Have you considered buying?

Often clients assume they need to lease a premises to operate their business believing buying is not financially viable. Yet on a deeper analysis of their business position, purchasing is sometimes more attainable and beneficial than first thought.

In this video, Nicholas Garland, O’Brien’s Director of Accouting & Business Advisory, discusses the three critical factors to determine whether buying a premises is right for you.

Please contact us if you would like support in understanding the best option for your business premises and how we can help you achieve it.

Video transcript

Nicholas Garland:

Should I lease or buy? And what option is the best for you?

So, a couple of weeks ago, I had a client call me and say, “Nick, I’ve got a couple of months left on my lease and I’ve been told that I’ve got a notice to vacate. Should I lease or buy a new premises?” So usually, we go through a process that involves a couple of steps. Three of those steps are, can I afford to buy? What terms would be involved with the financing of it if I can buy, if I can afford it? And the third is, which structure or which entity within the group should own the asset?

So, in this case, we actually went through a review of their balance sheet, had a look at the cashflow projections. They seemed fine. Then we spoke to a couple of brokers that we work with on a regular basis, and said, “This is the position. Can you please go and find some financing?” They came back with five options for us. Unfortunately, all five options had a term in there that the client was uncomfortable with. So we went back to the drawing board, restructured some of the debt, among a couple of other things, and went back to the broker who found a final solution for us.

The final solution didn’t have the term that made the client uncomfortable. It also saved them about $150,000 worth of funds they had to find within their business. So the client was very happy. We’re able to provide advice in relation to various financing options for you. My name’s Nicholas Garland. If you’d like to talk about any financing options for your business, feel free to give me a call.