5 benefits of acquiring a cold room through a lease-to-own model.
Limited finances are often a significant barrier to the adoption of on-farm cooling solutions, delaying the growth and efficiency of businesses reliant on cold chains and other temperature-controlled storage. However, there’s a practical and financially viable solution: owning a cold room affordably through a lease-to-own model. By acquiring a cold room through this model, as an exporter, you can overcome financial constraints while enjoying several benefits.
Here are 5 advantages you can get with this model that can improve the way you acquire a cold room, packhouse, precooler, or slaughterhouse.
1. Reduced upfront investment
One of the primary advantages of a lease-to-own model, or a rent-to-own, is the reduced initial investment required compared to buying on commercial terms. Businesses typically only need to pay a percentage upfront, such as 20%, and the rest over a period of variable 5 years, making it more financially manageable.
2. Cash flow management during lease to own
With lease-to-own arrangements, agribusinesses and exporters can spread the cost over time with affordable monthly payments based on their sales. This helps with better cash flow management since payments are made only once the cold room is operational and generate income. Additionally, since the lease payments are tailored to account for multiple factors, including the volumes, historical sales, and the length of your lease, you can enjoy greater flexibility in budgeting and financial planning.
3. Reduced operational through seamless maintenance
Like any other machine, all cooling solutions require regular maintenance to optimise performance, minimise downtime, and reduce cooling system breakdowns and consequent damage. Many lease-to-own providers take up the responsibility for servicing and maintaining the cold rooms throughout the lease, so as a customer, you have uninterrupted post-harvest cooling.
4. Hands-off acquisition process and all-inclusive pricing
As an exporter, opting for a lease-to-own model offers the added benefit of combining expenses like design, machinery and cold room parts, logistics and freight, installation, clearance fees, VAT and other import-related taxes, and ongoing maintenance and servicing. For you, this simplifies the acquisition process, so you don’t have to navigate the complexities of coordinating design, importation, or installation separately, as everything is handled within the lease agreement.
5. Predictable payments
Lease-to-own agreements typically involve fixed or flexible monthly payments over a predetermined term. This will make your budgeting easier, as you will know exactly how much you need to pay each month, allowing for better financial planning and cash flow management. Additionally, the sales-based nature of payments means that as an exporter, your monthly payments are determined by your historical average volumes sold or forecasted, providing the added flexibility to adapt to market fluctuations.
Owning an InspiraFarms Cooling cold room on lease-to-own terms
InspiraFarms Cooling solutions can now be acquired in Kenya the though lease-to-own model, for registered agribusinesses who have been in operation for a minimum of two years, and with rights to access land for the duration of the lease. Additionally, if you have a track record of growing and or exporting sufficient volumes of produce sold to cover the cost of the lease, you could acquire a cold room, packhouse, precooler or slaughterhouse. Contact us today at info@inspirafarms.com
