This option is used by developers on both the design and construction phases of a project.
Funds are utilized to finance capital assets of a building that will become the responsibility of the strata once occcupancy has occured.
Xpansion Leasing is uniquely positioned to offer fully customized deals to variety of sectors. We work with you to identify strategic scope packages that will provide a lower capital cost. At Xpansion Leasing, we can arrange lease financing for commercial, industrial, institutional and multi-residential properties. We are committed to assisting with your pre-strata leasing needs and will set forth options that best serve you.
Capital Cost Picture of Leasing Options
Refrigeration System Upgrades
HVAC / Equipment Upgrades
Life Safety Systems
New 200+ Multi-residential Project
The project was developed within Metro Vancouver needed to install 1) Key fob 2) security systems 3) fitness centre for the residents. The total cost for all the equipment was $200,000.
Three separate lease agreements were created so the payments for each item would match the provided payment schedule listed in the projected strata budget provided buyers with the disclosure statement. The term of each lease was 60 months.
The lease was funded to cover the cost of the equipment purchase and installation 2 months prior to the occupancy of the new residents to the property. Developer had to cover the initial payments, but after occupancy the lease reverted to the new owners of the strata.
Replace and repair of HVAC systems at existing condominium
A 30 years old building needed to replace and repair the HVAC systems. As strata continually face the competing objectives of keeping common expense fees low while properly maintaining and repairing common elements, Xpansion Leasing was able to find financial solutions that meet these objectives.
The lease agreements included the cost of all equipment plus the labour fee for up to 25% of the total lease amount with a flexible term that is affordable to the tenants. Since borrower is the strata, no personal guarantees of the unit owners were required as a condition of funding.
Strata was able to cover the cost of the HVAC replacement with a program that met their financial restrictions while allowing them to cover their other large annual expenses.
Benefits of Leasing
Conserve & Control Cash
Leasing allows the immediate acquisition of needed equipment, while retaining the use of working capital. Equipment leasing saves your working capital for day-to-day business expenses or unexpected construction or maintenance related expenses. Moreover, since a lease is independent from other sources of financing, it preserves operating and other credit lines should they be required for other purchases.
Tax Benefits & Improve Margins
Lease financing presents your business with potential tax benefits. Xpansion Leasing’s model not only lowers your initial capital requirement, but creates a vehicle for tax advantages on the annual lease payment. In addition, working capital intended for an equipment purchase can be retained in the business and invested to earn a higher rate of return. Lease often provide 100% financing with little or no down payment requirement.