Most office furniture dealers will be able to offer some sort of credit arrangement (subject to your status), but will probably require a deposit with order. This can range from 30% up to 75% depending whether the furniture is available from stock, made to order to a stock design, or made to your exact specification and requirement.
The dealer should be able to accept most credit cards but will often charge a handling fee ( typically 2%) as the margins on office furniture sales are not high enough to be able to absorb the costs charge by the credit card companies.
After the order have been processed and the deposit taken, the furniture is usually delivered and assembled a few weeks later (typically 10 days for stocked products, and 3 to 4 weeks for made to order items). An invoice will then be sent and the dealer would expect this invoice to be settled within 14 to 30 days, depending on agreed terms.
In some cases the dealer will be able to offer extended credit terms, such as a number of equal instalments with an initial deposit paid with order, and may even be able to rent the furniture to the customer in certain circumstances.
The more usual alternative to outright purchase is for the customer to sign an agreement to hire the furniture for a period of time, typically 3 to 5 years.
The customer pays an initial deposit, which is usually 2 or 3 months instalments, and then an amount each month until the end of the agreement. The main advantage of financing your office furniture purchase this way, is that you don’t have to find a large amount of money at the time of purchase, and can pay for the use of the furniture out of you monthly profit. This cost is fully deductible against tax as at no point do you own the furniture, but merely pay a monthly fee to use the furniture.
At the end of the agreement the office furniture company will contact you and offer to take back all of the furniture or will be able to sell the furniture to a 3rd party of your nomination for a nominal sum. You can the either decide to start a new lease hire agreement and replace all of the furniture, or purchase the existing furniture from the 3rd party, again at a nominal price. This time the furniture will appear in your accounts as capital equipment and you would have account for this in the normal manner.
An office furniture dealer will be able to give you lease cost rates per £1,000 of value, over a number of years but you should also consult your accountant and the lease company, as tax laws change frequently, and the lease option may or may not seem so attractive.
Currently there is a tax concession for this financial year which allows businesses to write 100% of any capital purchases up to £50,000. This means that although leasing is good for cash flow, for this year it has no tax advantages, as 100% of the furniture cost can be written off in one year, instead of the more usual 25% reducing balance basis.
As mentioned above, you should seek professional advice before entering into any lease hire contracts.