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Generate cash flow to safeguard your business

Generate Cash Flow Post-Lockdown

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How LUMENSTREAM’s LED Lighting as a Service can generate cash flow for your business in the post-lockdown economy.

 

You don’t need a stack of expendable capital to make your business sustainable.  In fact, your old lighting system is an opportunity to generate much needed cash flow for your business – risk free.

COVID-19’s impact on our economy

The COVID-19 pandemic has caused shockwaves across industry.  A significant portion of UK business was brought to a complete standstill, in order to comply with quarantine regulations imposed to restrain the spread of the virus.

Economists fear that the UK is moving into the worst recession witnessed in three centuries.  The UK’s Central Bank has seen an almost 30% drop in output in the first half of 2020, “the fastest and deepest recession since the ‘great frost’ in 1709,” according to the FT.

Prior to the pandemic’s outbreak, environmentally friendly and more sustainable practices had risen to their zenith on the business communities list of priorities.  With the world facing a squeeze on capital investment, will the looming recession have a negative impact on our shift to a more sustainable future?

At LUMENSREAM we say that a sustainable future goes hand in hand with the UK’s economic recovery.  In this article we break down and explain how advantageous our LED Lighting as a Service model can be for the planet and how it can generate cash flow for your business – without risk.

How can LED Lighting as a Service help your business?

We upgrade your business to LED Lighting for zero capital expenditure.

One month following the upgrade, you begin saving up to 75% on your monthly lighting operating costs (this saving is even greater if we introduce lighting control systems).

A fraction of the savings that you generate each month is then paid to LUMENSTREAM, via a monthly subscription fee.

Subscription based service agreement
Our subscription fee is paid for by the cash flow we generate for your business.

Read more about subscription based sustainability here:  The New World, Subscribed

This approach means that your upgrade is funded directly from your pre-existing operational expenditure meanwhile leaving you with significant surplus cash flow which you can re-invest back into your core business.

Our “pay as you save” approach means that we unlock positive cash flow for your business for zero capital outlay.

Is this a lease or financed lighting?

No.  LUMENSTREAM do not offer leased or financed lighting.

Our ESA (Energy Savings Agreement) was cleverly designed by our lawyers and accountants to be classified as a service charge which has no impact on your balance sheet.

Therefore, signing up with LUMENSTREAM makes sound financial sense because it will not affect your financial covenants or your borrowing capacity and it removes the need to invest capital into a depreciating asset.

Why does ‘off-balance sheet’ matter to my business?

Your balance sheet is a representation of your company’s assets, its liabilities and equity.  Subsequently any alterations have repercussions on your business finances.

Therefore, if you commit to a new project that’s crucial for your business (for example a new piece of machinery) you may not be able to commit to a sustainable project at the same time.  Even though it makes sound financial sense.

Our subscription-based service model will generate positive cash flow, remove your financial risk and limitations as it is off-balance sheet.

Financial Covenants

Off-balance sheet financing has been used historically to comply with financial covenants and safeguard business borrowing capacity.  Think of operational leases like vehicle fleets as an example of this.

IFRS Regulations Changes

In January 2019 the International Financial Reporting Standards (IFRS) updated its rules on operational and financed leasing with IFRS 16 (https://www.ifrs.org/issued-standards/list-of-standards/ifrs-16-leases/).

The new rules meant that all leases must be shown on a company’s balance sheet, resulting in further transparency and increased liability.  These changes would have negative consequences on any company’s financial covenants and borrowing capacity.

LUMENSTREAM’s LED Lighting as a Service has been carefully designed to ensure that our monthly subscription fees are classified as a ‘service charge’ and not any form of finance or operating lease.

In short, it will not appear on your balance sheet and has no impact on your company’s finances.

To learn more about how LUMENSTREAM’s Lighting as a Service model operates CLICK HERE.

With our innovative “pay as you save” model you pay us a service charge, not a lease.  This enables your business to upgrade its lighting without the burden of any financial risk, as we make all the financial investment for you, and generate positive cashflow, improving your bottom line, from day one.

If you would like to find out more about how LUMENSTREAM can generate cash flow for your business, risk free, then please contact us at info@lumenstream.com or call 0800 25 45 244.

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