Art Leasing is an alternative to purchasing art for your business that is rapidly getting popular. It is an alternative solution to buying artwork. Through art leasing, as the name suggests, artwork like paintings, photographs, etc. can be taken on rent for an agreed duration of time. An amendable agreement is signed to take the artwork on lease for a defined period of time. It is an attractive offer for offices, hubs, homes, and all places that constantly alter with their interiors. Art leasing thus becomes a cost-effective and practical option.
1. Lease Rental is 100% Tax Deductible
The main reason that the majority of companies lease rather than purchase art is that they use leasing as a method of reducing their tax bills. This is because lease rental is 100% tax deductible, meaning that all payments you make for your artwork are written off against your tax bill. For any profit-making business, this means a substantial saving in the real cost of acquiring art by lease rental. This could save you 20% on your lease payments,
2. Updating views at home
People who are keen to alter their home interiors often are the major target audience of the art leasers. Art leasing provides an easy, convenient, and affordable solution for bringing home pieces of art that best suits the space of the customer and which can also be updated after the duration of the agreement has expired.
3. Professionalizing workspace
The artwork has always been an epitome of class and sophistication. And especially in working or office setup, it adds to the professional environment. It also creates a better and interesting space for the employees to work. Also, businesses have the advantage to add these leased artworks in their operating expenses that help in cutting down their taxes.
4. Art leasing
With so many feathers of benefits in its hat, art leasing has gained popularity owing to its resource utilization skills, tax benefits, adjusting agreements, and cost-effective than purchasing artwork.
5. Conservation of Capital
The leased artwork is added to the operating expenses’ list which saves a handsome amount for the company in the form of tax deductions. These savings then can be further used in other capital expenditures. 10% to 25% is just the average return estimated after the taxes.
6. Prevention of Credit
Rent/lease and loan are two very different concepts. There is no interest rate in leasing that increases the principal amount that is to be paid. There is only borrowing of a commodity of artwork and hence it causes reductions in credit. Being an operating expense, leasing will help to boost the borrowing capacity of the user.
7. Sheet financing (off-balance)
Leasing an artwork as well as its asset is kept in the debt (operational expenses) column keeping it off the final balance sheet of the company.
8. Flexible financing
The terms and conditions in the agreement are kept after a proper negotiation and understanding of the client’s requirements and needs. Although the rates are fixed, the agreement is flexible that keeps the customer happy.
9.Lease structure is flexible
As suggested earlier, the making of the lease is done with appropriate and required consultation and agreement of the company to ensure that the unique and different needs of different businesses are met.
10. Feasible and practical alternative
There are so many financial benefits of leasing over purchasing like tax benefits, unfluctuating rates and payments, conservation of working capital as well as a reduction in bank credits.
There are certain frequent doubts related to art leasing.
Who can lease? There is no eligibility criterion for art leasing. An art collector, organization, business, self-employed, company, individual, anyone has the option of art leasing.
Is a down payment required? Not exactly down payment, but a token for security deposit is demanded, that is generally the two-month rent of the artwork.
TOMAAS leases art to businesses and private owners internationally. 50% of rental fees paid on a work of art can be applied to the purchase price of the work.
HOW ART LEASING WORKS
Select your masterpiece and send us a request for it on firstname.lastname@example.org
What is the cost of leasing art?
The art leasing fees are derived from the fixed percentage of the retail price of each individual artwork. These percentages are subject to change or amendments (if required) in the duration of the lease.
What is the duration of the lease of the artwork?
The Art Lease Agreements’ durations are two folds: (i) Semi-annual (6 months)
(ii) Annual (12 months)
When is my bill due?
The bill can be paid in full advance (upfront) or on a monthly basis, whatever is convenient for the client.
How will I be billed?
The option for upfront payment is done while completion of the order. If the monthly basis option is chosen, it becomes like a monthly subscription but in this case, the initial security deposit of approximately the first three months is to be paid.
The payment methods include credit cards, PayPal, or Direct Bank Transfers (BACS).
Despite differing payment methods, valid credit card details have to be registered.
How to terminate the Art lease?
After the first 90 days, the lease is eligible to be terminated but with an appropriate 30 business day notice.
Am I allowed to sell the artwork that I have taken on a lease?
Yes, the leased artwork can be sold and you are eligible to be credited with the sale’s commission. But prior to this, it is mandatory for you to notify us about the sale within 3 business days. The payment of the artwork would be due after a week i.e., 7 working days of the sale.
Can I later buy the artwork that I have leased?
Absolutely. The leased artwork can be bought anytime that would cost the leased artwork’s retail price ( + 10%). The purchase price is set at the end of the leased duration according to its rate then.
If the purchase is announced before the end of leasing period, then the buyout prices would be higher. The total cost (leasing cost + buyout price) is then set to retail price + 10%.
Also, High Volume Orders would yield a handsome discount.
Are there any additional fees associated with the lease agreement?
Yes. The initial cost serving the purpose of a security deposit is a plus that is necessary prior to the delivery of the leased artwork.
Is any kind of insurance needed for the leased artwork?
No, it is not necessary to insure the leased artwork. But yes, the client is held financially responsible for any mishap like damage or theft of the leased artwork.
To know more about us and our services, we’ll be at your service at 033(06)28751989. Or you could also write to us at email@example.com