A huge consideration within a hotel FF&E project is the financial piece of the puzzle. From developing a product budget that your bank will use to establishing payment terms that fit the situation, an end-to-end procurement provider can make the “money” side of a project go smoothly for new builds and hotel renovations alike.
FF&E Finance Definition
Generally speaking, finance for FF&E projects centers around how and when you will pay for the hotel furnishings you are purchasing. At Innvision, our dedicated credit department assesses a hotel owner/developer’s financial situation on the front end of a project as it pertains to creditworthiness, with a sensitivity to borrowing costs, to determine the best payment terms to offer. On the back end, the finance function provides clear accounting so you know what you have paid for and what is still due.
What FF&E Finance Includes
One of the most significant benefits a service-oriented procurement provider can provide is to tailor the deposit and payment terms to suit your needs. With a graduated payment plan in place, you can hold onto funds longer - lowering your interest costs and risk – and make payments as products are shipped, rather than paying fully in advance. Working with a credit department for hotel FF&E also removes the stress of writing one hundred or more checks to vendors and keeping track of them all, as the financial analysis team manages all order placements and payments on your behalf.
Things to Consider About FF&E Finance
1. Pay Attention to Timing
When applying for credit terms, the earlier you do so, the better. Proactively discussing payment terms and deposit amounts with a procurement provider at the start of a hotel project will allow your project to move forward without delay when it’s time to place orders. However, it’s also essential that you have everything in place before applying for credit. Negotiate with your bank and thoroughly review your purchase agreement well before you apply. Look over documents as soon as you receive them and respond promptly to questions or concerns immediately.
2. Get Your Finances in Order
Before you apply for credit terms, you need to make sure you have the appropriate funds at your disposal for each stage of the project. Whether you’re getting funding through a loan or from a capital expenses budget, it is vital that you keep budget and project costs in mind at all times. If you fail to make payments per the schedule agreement, your provider may halt services before your project completes.
3. Communicate with Your Bank
A financial analysis team can’t begin their services without first talking to your bank. Banks are careful about discussing customer finances due to the sensitive nature of the information, and sometimes they won’t deliver necessary reports even if the FF&E credit department has signed authorization documents. Therefore, to minimize any delays or constant back and forth, alert your bank that your FF&E partner will be calling and grant express permission to share all your information to make the process as seamless as possible.
Innvision Hospitality’s dedicated credit department works directly with clients to answer questions, collect information to assess their financial situation, and offer guidance when possible. Our flexible financial analysis procedures enable us to determine a payment plan that works for all parties. Contact Innvision today to set up financing for your FF&E project!