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Reply To: Help! My colleague rents beauty equipment and the hire place will not budge on the ongoing costs, over $2000 since lockdown began, the subsidy needs to go towards her mortgage not equipment at her salon that she is unable to enter. Zero cashflow coming in like everyone else, any information on how to approach this hire company AGAIN would be much appreciated. Her business is simply not going to survive this cost at $350 a week. 

Hi,
Your colleague’s predicament is very understandable.

I suggest your colleague reviews the hire purchase agreement to see what rights are available to temporarily suspend or terminate the agreement. Is there an agreement in writing? Is it possible to terminate and restart the agreement after lockdown?

Assuming its a fixed term written agreement then the next step is to approach the hire company in person (keeping social distancing in mind) or virtually to negotiate a discount or rebate on the weekly hire cost.

Remember the hire company is probably in the same boat as your colleague. You can’t simply pass the cashflow problem to them – what can you offer the hire company to make it attractive for them to negotiate with your colleague? At the end of the day the hire company does not want to see its clients going out of business so it does have an interest in negotiating.

Another lateral option to consider is looking to purchase the equipment via a bank or government funded loan ($10K plus $1.8K per employee – interest free for a year) from the hire company and get the benefit of an interest free loan. However, you have the obligation to pay this off and interest after the expiry of 1 year.

Lastly, just for the sake of completeness, I suggest your colleague checks their insurance arrangements to see if there is any cover under the general business insurance or under the hire purchase insurance contract that accompanies some HP agreements.

Good luck to your colleague.