Facing an investment to improve the premises is not always easy for a hotel, bar or restaurants business. Even when the numbers ensure an increase of the amount invested, as is the case of covering the terrace with Tubbo to be able to obtain revenue the whole year, not only during the summer months.
The problem is often not even to have cash or credibility with the bank to obtain credit, but fit the investment in the annual accounts without disfiguring the actual results, as the acquisition will appear as an expense 100% attributable to the current year, while the benefits it will generate will occur over several years, lowering the profitability ratio for that year.
We have consulted with financial experts what would be the best financing formula that allows the innkeeper to make the investment comfortably and keeping track of payments made to make your terrace productive throughout the year with the benefits you get for it. Most of the experts decide on the leasing.
Leasing is a financial formula in which 3 parties act, the hotel owner, the leasing company and Tubbo. With this formula, the leasing company (usually a bank) acquires the configuration of Tubbo that best fits the needs of the innkeeper and signs with the establishment a leasing agreement.
Through this contract, the innkeeper would pay the Tubbo in monthly fees to the leasing company and, at the end, may choose to acquire the property by paying a last fee for the “residual value”, renew the contract, or return the Tubbo.
The advantages of acquiring a Tubbo on leasing are:
• It allows financing 100% of the operation, without the need for an initial outlay, so the establishment does not need to use its current assets.
• The leasing does not appear on the balance sheet, so it does not increase the debt ratio or reduce the economic profitability of the establishment, on the contrary, it increases it thanks to the increase in profits obtained on the terrace.
• Fees are a deductible expense and allow the accelerated tax depreciation of the asset, so it is fiscally advantageous.
A real case
A Tubbo of 10m. which can comfortably accommodate 30 guests for dinner can cost around € 30,000, including air conditioning, lighting and doors.
A lease at 36 months for that amount means in most cases a fee below € 1,000 per month. Specifically, at 7.5% interest there would be a monthly payment of € 906 and a residual value of € 1,000, for which we would obtain the property of the Tubbo.
With this Tubbo, which has capacity to serve 3600 diners per month (if you work in two shifts for at least 26 days a month and that without doubling services), we would have to devote barely 25cts of euro from each customer’s account to pay the leasing quota.