Energy efficient lighting installations can be financed through an equipment financing facility through a number of our funding sources.
This type of lighting installation is typically financed in the form of a capital lease where at the end of the lease term the assets are purchased by the lessee for a nominal amount of no more than $20.
The financing term that is potentially available for financing lighting will range from three to five years in length with the most common terms being four years or less.
Commercial equipment financing can be arranged for lighting equipment installed in both owned and leased buildings.
For leased or rented buildings, the landlord will have to sign a waiver from the lender or leasing company to provide the financing company access to the equipment in the event of default of any financing facility provided as the lighting equipment would form a part of the lender or leasing company’s security.
Because of the nature of the asset, financing approvals will be more straightforward to come by for companies that are at least three years in business and have a well established cash flow for debt servicing as the energy efficient lights by themselves do not offer a great deal of security value to a lender in an installed state.
Companies that are less than three years in business will have to provide at least one strong guarantor in order to be considered for financing.
In terms of the financing amount compared to the acquisition cost, most of these installations can be funded at or near 100% of the purchase price.
And where there are deliver and installation costs in the price that you wish to finance, these amounts can potentially be funded as well, providing funding in excess of 100% of the purchase price of the actual asset.
If your business is looking to upgrade the lighting in several different facilities, we can also look to set up loans or leases for each location to not only work with your business accounting for each location, but to also spread the financing risk among different lenders which can end up providing greater access to capital as well as many lenders are not interested in having a large position in this type of asset.
The key here is that there can be flexibility to set up the financing in a manner that makes sense for your business operations and operational reporting preferences.