Paying rent quarterly in advance.

[zanygame]

How many businesses on here would benefit hugely from not paying their rent quarterly in advance. You pay a 3 to 6 months rent deposit, so there's not much chance of the owner losing out. In fact it seems short sighted of land lords as many business go belly up on quarter day. Whats your experience with talking to your landlord.

 

[Richie N]

Best to negotiate rent terms at the beginning of the lease. There are enough properties out there to get a good deal.
Can always do bi monthly instead of quartely which makes it easier.

 

[fairdealworld]

Coming very late to this thread I think it is always worth asking your landlord if you can pay monthly. Some will say no, some will see it as being in their own best interests.

I always thought I was just stuck with the quarterly payments as this was written into the lease. Then when the recession started to bite and I was struggling, my landlord (an individual rather than a company but one who leases out many business premises) spontaneously pointed out that he was always perfectly happy to accept monthly rather than quarterly payments from any of his leaseholders.

I went over to paying monthly, it has helped me, and it must help my landlord too as he gets regular payments but with less danger that he'll find his leaseholder has suddenly declared bankruptcy

Lynn

 

[internetspaceships]

As both a Landord and a tenant I refer quarterly, and from both angles. It's really only the first quarter that is likely to cause an issue because if you have a tight month you have usually got two more to make up the difference on a quarterly basis.

Assuming naturally that you do actually save your rent on a month by month basis.

 

[zanygame]

Well considering how many businesses go into administration on Qtr day, I would guess they don't put money aside.
The point I was making was, that no other business can get their money three months in advance (Usually plus a three month rent deposit) most businesses not only can't get their money up front, have to give terms.
Especially in this recession when finding money is so difficult, having to find several thousand pounds 3 months in advance of the service you receive, is very difficult.

Also i have no idea where the idea came from.

 

[internetspaceships]

To be honest if a business is struggling to the point where they cannot budget for saving the money in order to go into a premises, then can they really afford to take that step and the commitment?

 

[deniser]

I quite like paying in advance and quarterly knowing that I have a credit effectively which will keep me going for 3 months. I wouldn't change to monthly if it were offered.

But yes, there is a move towards making monthly payments standard by the big property organisations although this is still being resisted by some of the corporate landlords.

 

[zanygame]

Thats Madness Deniser, wouldn't you rather keep your money in your pocket?
Do you favour paying all your bills 3 months before they are due or just your rent.

"To be honest if a business is struggling to the point where they cannot budget for saving the money in order to go into a premises, then can they really afford to take that step and the commitment"

Most entrepeneurs when they set up have very little spare cash and it really isn't such a small amount, our quarterly bill is £17,000 add this to the £17,000 rent deposit and we have £34,000 sitting in someone else account.

 

[internetspaceships]

Thats Madness Deniser, wouldn't you rather keep your money in your pocket?
Do you favour paying all your bills 3 months before they are due or just your rent.

"To be honest if a business is struggling to the point where they cannot budget for saving the money in order to go into a premises, then can they really afford to take that step and the commitment"

Most entrepeneurs when they set up have very little spare cash and it really isn't such a small amount, our quarterly bill is £17,000 add this to the £17,000 rent deposit and we have £34,000 sitting in someone else account.

Until you can afford to buy your own that's (sadly) the name of the game Zany.

I know how you feel. I'm budgeting and saving to build my own at the moment, so I do understand where you are coming from.

How many sq ft do you have for that?

 

[Lee Jones Jnr]

Why are we accepting as fact that businesses simply go under when the quarterly rent is due? Where are the statistics?
It only really matters when you are starting up and have no cash coming in, after that who cares if rent is paid weekly, monthly, quarterly or whatever - what difference does it really make? If business is so tight that you are concerned about the interest you could have earned on the rent money then perhaps you have bigger problems to address?

 

[internetspaceships]

I agree with Lee here.

 

[zanygame]

Hi Interspaceships
We have two units the one I quoted is 12,000 sqft.

Lee jones Jnr
Why would anyone however rich want someone else to hold 30k of their money whilst offering no interest, on a permanent basis.
As regards Quarter day, try typing 'quarter day bankrupcy' into google. Its a well known phenomenon. A point at which struggling businesses are pushed over the edge.

 

[Lee Jones Jnr]

Hi Interspaceships
We have two units the one I quoted is 12,000 sqft.

Lee jones Jnr
Why would anyone however rich want someone else to hold 30k of their money whilst offering no interest, on a permanent basis.
As regards Quarter day, try typing 'quarter day bankrupcy' into google. Its a well known phenomenon. A point at which struggling businesses are pushed over the edge.

If a business can't pay its rent then it is for the best that they die, otherwise they will increase the negative impact that their inability to function at a profit has on suppliers who lose out on any unpaid invoices, and the landlord who is after all, running a business not a charity.

You must not be in the UK, Google shows no such 'well known phenomenon' here, even when you spell the term correctly.

With regards deposits and payment of rent in advance, nobody is forced to agree to these terms, they are free to say no thankyou and look for premises where the landlord will agree to their terms.

 

[zanygame]

Well yes I am in the UK(spymissions.co.uk) and many small businesses find paying their rent three months in advance puts a heavy strain on their cashflow.
We have backing now, but when we set up this was a big issue for us.
(As regards my spelling, I have Doslicksia, so you'll have to bear with me on that one)

You say that no one has to accept these terms, but you try getting a rented premises without signing up to them, especially as a new business.

Finally this thread has gone in a strange direction,Ii fully expected arguments that land lords need to protect them selves. I did not expect to see an argument that handing out 30k of your hard earned cash was good for your business.
Its a novel idea, but I am more than happy to help your business out in this way.
Please send the cheque to Bob Richardson at.........

 

[deniser]

Thats Madness Deniser, wouldn't you rather keep your money in your pocket?

No, we don't have a cashflow problem and I like to know that I am paid up and only have to think about keeping the tax money back rather than the rent as well.

Also, less payments means less to worry about.

I pay everything in as few instalments as possible. If there is an annual option rather than monthly I will take it.

Now, if interest rates on business accounts were more than half a percent, it would be an entirely different matter!

 

[deniser]

As regards Quarter day, try typing 'quarter day bankrupcy' into google. Its a well known phenomenon. A point at which struggling businesses are pushed over the edge.

Probably a good thing to be pushed sooner rather than later. Is there any point in prolonging the agony?

 

[Lee Jones Jnr]

Well yes I am in the UK(spymissions.co.uk) and many small businesses find paying their rent three months in advance puts a heavy strain on their cashflow.
We have backing now, but when we set up this was a big issue for us.
(As regards my spelling, I have Doslicksia, so you'll have to bear with me on that one)

You say that no one has to accept these terms, but you try getting a rented premises without signing up to them, especially as a new business.

Finally this thread has gone in a strange direction,Ii fully expected arguments that land lords need to protect them selves. I did not expect to see an argument that handing out 30k of your hard earned cash was good for your business.
Its a novel idea, but I am more than happy to help your business out in this way.
Please send the cheque to Bob Richardson at.........

I moved premises at the beginning of the year, I didn't pay a penny deposit or any rent for 6 months. When you agree to take on a premises the terms are agreed, they are not sprung on you as a surprise once you have committed. It seems pretty clear to me that having accepted whatever terms agreed in the lease it is pretty foolish to then complain about them afterwards.
You don't see the benefit of paying bills? Lets see how that works out for you long term.

 

[fairdealworld]

Well I'm not 'complaining' about the terms I agreed to, simply saying that my landlord and I have reached a new informal but useful agreement which was taken against the background of very changed trading conditions. Also the suggestion came from the landlord, it wasn't a request I made, so presumably the landlord thinks it is in his own best interests as well as mine.

It is too simple to say 'why prolong the agony' or regard every business going through a difficult period as doomed. Some businesses have no hope, sometimes hard times produce a re-assessment of the current trading model and the business moves into a new future. One of my own suppliers was very near to closure just a few years back but is now in a strong trading position.

As I say, I didn't ask my landlord for anything but was happy to accept a suggestion I found helpful. Frankly if I ceased trading - and I don't view myself as 'hanging on' but as developing my business in response to changed conditions - my landlord would lose a good tenant and have little hope of getting a new tenant probably for months and maybe for years. There are two empty premises within yards of my own, one has been 'To Let' for almost two years, it is in good repair and almost identical to my own...

 

[zanygame]

Lee Jones Jnr said
"I moved premises at the beginning of the year, I didn't pay a penny deposit or any rent for 6 months. When you agree to take on a premises the terms are agreed,"

I'm sorry to here that Lee, did you explain to your new landlord that you preferred to pay all your cash up front?
Still as I say, if you feel the need not to have the money in your own account I am more than willing to take it off you.

 

[Lee Jones Jnr]

Lee Jones Jnr said
"I moved premises at the beginning of the year, I didn't pay a penny deposit or any rent for 6 months. When you agree to take on a premises the terms are agreed,"

I'm sorry to here that Lee, did you explain to your new landlord that you preferred to pay all your cash up front?
Still as I say, if you feel the need not to have the money in your own account I am more than willing to take it off you.

Not very bright are you petal.
To be honest with you it's nice not being in dire straits and having to worry about such trivial matters. You have my pity.
You also have access to the increasingly large ignore list. Byeeeeeeeeee.

 

[zanygame]

Who needs your pity, we have the backing of a multi millionaire and we are rolling out across the country. I was talking on behalf of all those small businesses that are struggling in these difficult times.
What they don't need is some smug git telling them he can afford to pay any bills months in advance and that if they can't, they would be better off going out of business.

Even if you can afford it, its still not very bright to give someone else your money before you need to. Even the largest companies don't do that, in fact the really bright ones use the financial prowess to delay paying their bills for as long as they possibly can.

What were you saying about being bright?

 

[internetspaceships]

Zany whislt I don't agree with a most of what Lee says or the way he says it he does have one good point.

If you signed up to pay rent quarterly in advance then just do it. It's what you agreed to do, and there's no point even making it an issue.

The "large corporates" as you say also pay quartlery rent in advance . IF that's what they sign up for in the first place.

 

[zanygame]

Your right Int..Ships
And maybe Lee is right about landlords taking a view in the current situation. I was questioning the status quo and wondering how it got there.

 

[mhall]

Your right Int..Ships
And maybe Lee is right about landlords taking a view in the current situation. I was questioning the status quo and wondering how it got there.

It just evolved when Landlords had control and property was in demand. It is no longer the case and now everything is much easier to negotiate. Landlords will always want money up front - it's their business and who wouldn't want to get paid 3 months up front ?

Nowadays it is begining to become outdated and every landlord will argue for the status quo. It is the Retailers duty to negotiate and it's easier than it's ever been.

But you are right - end of this month will be interesting and some Retailers who didn't negotiate may struggle if the cashflow isn't there - especially those who have to pay up front for the Christmas stock - and this will effect the big boys (I see Clintons have already asked its' landlords if they can delay payments) as much as the little ones.

 

[cctv installer]

I had a small shop and was lucky to renegotiate my rent to be payable monthly instead of quarterly, lack of cashflow often causes businesses to fail. Overheads are the worst.

 

[ljpilling]

I have just this last 2 weeks paid my quarterly rent, annual building insurance and for all of my xmas stock (I sell cards, gifts etc) after the slow summer trade I am now effectively SKINT! Hoever, on the plus side I now have the rest of the year in which I have no rent to pay and the huge christmas demand coming.

Personally I like payin my rent in quarters, it works for us but I can understand how it doesnt work for a lot of other companies

 

[Lee Jones Jnr]

I have just this last 2 weeks paid my quarterly rent, annual building insurance and for all of my xmas stock (I sell cards, gifts etc) after the slow summer trade I am now effectively SKINT! Hoever, on the plus side I now have the rest of the year in which I have no rent to pay and the huge christmas demand coming.

Personally I like payin my rent in quarters, it works for us but I can understand how it doesnt work for a lot of other companies

With the exception of start ups, I cant really see why anyone would care if it were weekly, monthly or quarterly. If you prefer to pay monthly, put the money aside at the end of every month and forget about it, then simply hand it over once every three months.

 

[zanygame]

Because you have to pay it 3 months in advance. Its not a matter of putting it aside month by month, you have to pay it in advance! Can you imagine if you had to pay all your invoices 3 months in advance.

 

[Lee Jones Jnr]

Because you have to pay it 3 months in advance. Its not a matter of putting it aside month by month, you have to pay it in advance! Can you imagine if you had to pay all your invoices 3 months in advance.

Which only matters to a start up. After that you have to pay every three months, it doesn't make and difference if it is in advance or in arrears.

 

[kelvin1950]

To a start-up, the first 3 months rent is a start-up cost. From day 1 of trading, you then put aside, monthly, the next rent payment. Does that make it easier to understand?

 

[internetspaceships]

Because you have to pay it 3 months in advance. Its not a matter of putting it aside month by month, you have to pay it in advance! Can you imagine if you had to pay all your invoices 3 months in advance.

Mate, if you have a multi millionaire backer why would it worry you?

 

[zanygame]

As i said earlier it doesn't worry me personally, I was talking on behalf of all those little businesses who are struggling. I raised this point on here after a conversation with a colleague who had heard a piece on Radio 4 about qtr day bankruptcies.

I do understand that mathematically once you are past start up it makes no difference whether you are paying in advance or arrears, its still monthly.
But in reality its not like that. Most startups are very under funded and every penny counts, they tend to stretch their terms, pay their Vat late Etc for the first couple of years.
Having to pay a hefty rent deposit and 3 months in advance doesn't make things any easier.
Now in these straightened times finding that next qtrs rent in advance is one more nail in some very shaky business coffins.

Interestingly I discussed this with our investor and even he thinks it would be better to have the money in our bank than someone elses.

 

[Lee Jones Jnr]

Who cares if shaky businesses go under? Natural selection and all that, if you can't pay your way then you die. That is as it should be.

 

[zanygame]

Nice guy.

 

[ETCSports]

How many businesses on here would benefit hugely from not paying their rent quarterly in advance. You pay a 3 to 6 months rent deposit, so there's not much chance of the owner losing out. In fact it seems short sighted of land lords as many business go belly up on quarter day. Whats your experience with talking to your landlord.

Mine is fairly good, good communication and response.