Welfare units have a very important role to support the wellbeing of colleagues, particularly in the construction sector. Compact and convenient, a welfare unit can provide everything from toilets and showers, to places to sit, eat and socialise.
Whilst having welfare units on site is necessary to ensure compliance with health and safety standards, the finance options to acquire them are not so black and white. In this blog we explore the types of funding that might be available to operators looking to acquire these essential pieces of kit.
Cash or Credit? The Funding Options:
Whilst you could use cashflow to buy new or used welfare units, there are a number of finance solutions available which, if utilised effectively, could help to preserve your working capital, which could then be allocated to other business needs.
Below are three of the most popular funding solutions available for purchasing a welfare unit and the principles of how they work:
Hire Purchase (HP): Hire purchase allows you to buy welfare units but pay for the cost over a specified period of time. You begin with an initial upfront deposit, followed by regular instalments, usually paid monthly. Throughout the period of the HP agreement, you would have full possession and use of the welfare unit but the actual ownership isn't transferred to you until the final instalment is settled. After all payments, including any interest charges, are completed, ownership of the unit is then transferred to you.
Finance Leasing: A finance lease is an alternative funding structure which is also set up over a specific period of time. Over the duration of the agreement, you make regular payments which typically cover the cost of the welfare unit, plus interest, and any additional fees. At the end of the lease term, you have a number of options. You can purchase the welfare unit at its residual value, return it to the seller, or enter into a new lease agreement.
Asset-Based Lending (ABL): ABL offers a flexible form of finance and could be an option if you already own a number of unencumbered assets. It allows you to secure additional capital by leverage your existing machinery and equipment. The lender assigns a value to your existing assets and puts in place a credit facility against that asset value. Funding is charged at a set interest rate and carries fees and charges from the lender. It’s an innovative approach which offers flexibility and scalability, making it an ideal choice for businesses seeking a more tailored funding solution, particularly those pushing for growth.
Keen to find out more?
At KeySME Business Finance, we help SMEs secure competitive funding for a wide range of construction and infrastructure assets - In fact, 2023 was our busiest year yet for funding welfare units!
So, if you’re currently looking at welfare units for sale and require funding to support your purchase, get in touch with our friendly and knowledgable team. We can offer expert guidance, competitive rates and structures tailored to your specific business needs. From application to approval, our slick processes minimise hassle and remove unnecessary admin, helping you to focus on what matters most - Your business!
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