Lease financing, also known as furniture leasing, allows property businesses to acquire furniture without making a large upfront payment. Instead, they enter into a lease agreement with a leasing company, which allows them to use the furniture in exchange for regular lease payments over a specified period of time.
Here’s a general overview of how lease finance works for furniture:
1. Selection of Furniture: The lessee (the business seeking furniture) chooses the furniture they need from a selection of trade suppliers provided by the leasing company. This can include items such electrical items and soft furnishings.
2. Lease Application: The lessee submits a lease application to the leasing company, providing necessary information such as their business and project details, ID, proof of address and owned property details.
3. Credit Approval: The leasing company evaluates the lessee’s application and creditworthiness. They assess factors such as credit score, financial stability, and payment history. If approved, the leasing company will offer lease terms, including the monthly payment amount and the lease duration.
4. Lease Agreement: Upon acceptance of the lease terms, the lessee and the leasing company sign a lease agreement. This document outlines the terms and conditions of the lease, including payment details, lease duration, any additional fees, and the rights and responsibilities of both parties.
5. Delivery and Acceptance: The delivery of the furniture is agreed to the lessee’s premises. The lessee inspects the furniture to ensure it meets their expectations and notifies the leasing company of acceptance.
6. Lease Payments: The lessee is required to make regular lease payments as specified in the lease agreement. These payments are typically made on a monthly basis. The amount is determined based on factors such as the cost of the furniture, the lease term, interest rates, and any additional fees or charges.
7. Maintenance and Insurance: The lessee is responsible for maintaining the furniture in good condition throughout the lease period. This includes routine cleaning and addressing any damages caused by regular use. The lessee may also be required to obtain insurance coverage for the furniture to protect against theft, damage, or other risks.
8. End of Lease Options: At the end of the lease term, the lessee typically has a few options. They may choose to return the furniture to the leasing company, renew the lease for an extended period, or purchase the furniture at a predetermined price, known as the buyout option.
It’s important to note that specific lease agreements may vary depending on the leasing company and individual circumstances. It’s recommended to carefully review the terms and conditions of any lease agreement before entering into the arrangement.
To find out if you can use lease finance to furnish your next project, contact:
Talk to Power Team®
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