By Andrew J. Pisani
The world of building management is a world of projects. As soon as a new building goes up, the que of improvements begins. There’s always new voices and opinions, and new ideas to improve or fix any current issues. While all projects serve the ultimate good of the building, any to do list has a sense of priority. Some projects add value, other offer savings. When prioritizing where to start or which project to move on, it’s helpful to consider projects that can actually self fund.
Self funding projects are capable of moving to the top of the que, since they don’t take resources away from other projects. These projects often are tied to incentives – offered by manufacturers or utility companies – or provide an immediate savings based on operating costs. One type of project that fits squarely within this is a building wide LED lighting retrofit.
An LED retrofit presents a favorable opportunity from a cash flow perspective. While there may be a significant cost of upgrade, the monthly savings drops to the bottom line. One way to make the math work is to allow a third party to provide the financing.
A third party, such as M-Core Credit Corp – will provide the capital to purchase the system, in exchange for a lease agreement that guarantees monthly payments. For LED systems, the energy savings is significant, so much so that the monthly savings may exceed to cost of the lease payments.
A lease agreement may cover a term of anywhere from two to five years, with the monthly cost related to the term of the lease. Longer term means lower cost, but more interest. Shorter term means higher monthly payments. The building can decide which option to choose based on anticipated and then actual monthly savings from the new system.
Lease agreements are not complicated financial transactions – in fact, the entire process may take a single business week. Working with a third party implicitly focused on financing may also bring new opportunities to apply the same thinking to other projects within the building. A good first step is to speak with an expert, and for that your first email should be to Michael Weisberg at M-Core Credit Corp – firstname.lastname@example.org. He will walk you through the options, and opportunities of moving certain projects up to the top of the que.