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| Lease Finance |
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Leasing Introduction
Why Lease?
Why "make do" with equipment that "won't do"? Whether you are a sole trader, a PLC or a government dept, cash flow is the lifeblood of business. Our flexible leasing solutions can give you the tools your business needs to stay competitive - rather than what cash flow may dictate or capital budgets restrict.
You can lease any product on our online store with a value over £500 ex VAT (subject to approval)
Update Your Equipment Now
Buying new technology can take a huge bite out of your working capital and loans tie up existing credit lines, which could be left free for operational needs or business expansion. Leasing gives you the latest technology at a price you can afford, along with attractive tax benefits.
It is a widely used facility, which enables you to acquire the technology you need today at an affordable fixed monthly cost. What could be better for your business and your cash flow?
You can lease an entire system including accessories, software and even support. You will also find it easier to upgrade your system - ensuring your business benefits from the latest technology.
- Hardware Components
- Software License
- Netware
Leasing Overview
How to use leasing
You may want a new Network but think it's a lot to pay out in one go. Now you don't have to worry about finding the lump sum, our leasing facility enables you to make the most of your budget by spreading the cost of the equipment over a period of time. This can make a big difference to your cash flow if you are buying for a whole department or company. Because we deal with leasing providers who specialise in IT finance, you are able to lease the entire system including accessories, software and even the support. You can even upgrade your system before the end of your lease, enabling a consistent revenue budget to keep your networks totally up to date.
What is leasing?
Leasing is a financial contract between your company and a leasing company. You will be committed to repay a given number of fixed payments for the term of the contract, for example; 36 monthly payments of £250 as opposed to an upfront spend of £8,000. We supply the goods to you and we are paid by the leasing company i.e. you are effectively renting the goods from the leasing company for the duration of the lease. The goods are owned by the leasing company at all times. Because you are renting and not buying the goods you can claim 100% tax allowance on the payment.
Who can apply?
Lease finance is available to all companies within the UK, which includes sole traders, partnerships, limited companies, PLC's, national, and local government departments, schools, universities, hospitals & charities. The minimum price that would qualify for a lease is £500 + VAT and there is virtually no upper limit.
Easy to arrange
It is very easy to arrange a lease - just call us with your requirements to get an instant quotation on your equipment you need or use our online shopping basket tool. Please note that the figures quoted may change depending upon the credit rating and status of the applicant. We handle all the paperwork and all you have to do is sign the appropriate forms which are sent to you.
Benefits Of Leasing
Ease Of Use
- Simple paperwork - one signature required
- Immediate implementation
- Combine expenditure and services into one agreement paid over a predetermined timescale
Avoids Capital Expenditure & Budget Constraints
- Cash is becoming more important
- Financing removes the need to find capital budget
- Avoids competition for funds from other IT projects
- Keeps your capital working for you
- Protects your overdraft and optimizes your commercial credit
- Opens new credit lines
Tax Benefits
- Leasing is 100% off-settable against pre-tax profits
Flexible Payments
- Choose from 2 to 5 year terms
- Monthly or quarterly payments
- Payments can be adjusted seasonally
- Low start payments where applicable
- Lease rental, lease purchase or operating leases
- Technology exchange rental
Budget Management
- Fixed monthly payments for accurate budgeting
- Upgrade whenever you choose
- Payment model reflects project gains
- Preferred option for budget holders & business sponsors
Technology Gains
- Enables best-fit technology not compromised by capital constraints
- Easy upgrade path maintaining revenue budgets
- Business benefits from today's technology using tomorrow's money
Lease Finance vs. Outright Purchase
Is it better to buy the equipment outright or to lease it? Below we will try to show you that from a cash flow point of view, leasing has considerable advantages.
An up and coming design agency has decided that it needs to update its existing Macs. They have decided that the system upgrade will cost a total of £11,750 inc VAT, they have also decided that they expect to expand further within the next 3 years to ensure that they don't fall behind the technology stakes again. The following two scenarios show the financial benefits of leasing against buying.
Scenario 1 - Buying outright
The company buys the new systems for a total of £10,000 + VAT, with an immediate hit of £11,175 against cash flow. However, VAT can be claimed back at the end of the current quarter in 3 months time.
And that's it; their money is tied up in the new equipment, so if they had other plans for the £10k then they're going have to get it from elsewhere. Over the next three years the company can claim back 25% of the depreciating balance per year.
Initial Purchase Price £10,000
Year 1 25% of £10,000 = £2500 - Balance = £7,500
Year 2 25% of £7,500 = £1875 - Balance = £5,625
Year 3 25% of £5,625 = £1,406 - Balance = £4,219
So at the end of the systems' expected working life the company has been able to claim £5,781 against pre tax profits leaving a net outlay of £8,265.
Scenario 2 - Lease Rental
The company leases the systems over a 3 year period paying 1 initial payment of £343 + VAT, then 35 monthly payments of £343 + VAT. So out of the original £10,000 + VAT budget they still have £9,657 to spend on stock which they can sell for a profit, something that could not have been done if they had bought the equipment outright. This really is a case of having your cake and eating it.
But there's more. Not only does the company retain the money to spend on more stock, but the payments they make on the lease are 100% tax allowable against pre-tax profits. As shown below:
Year 1 100% of £4,116 (12 x £343)
Year 2 100% of £4,116 (12 x £343)
Year 3 100% of £4,116 (12 x £343)
Total that can be claimed back against pre tax profits is £12,348 - leaving a net outlay of £8,643.
Even though the lease rental has a higher cost of £2,348 the ability to claim all payments against profits compared to the £5,781 for the outright purchase shows the tax benefits of leasing equate to almost £2,000 - a net cost of difference of £378 but have had the benefit of £10,000 working in the company, or sitting earning interest or avoiding onerous overdraft charges.
Conclusion
Our leasing solutions can give you the tools your business needs and not what your bank account dictates to you.
So leave your overdraft intact and take the pressure off. After all, today's cutting edge equipment will be tomorrow's old hat. It's the flexible that prosper, not the companies that hang on to old, outdated equipment.
Leasing Terms
- The rentals are fixed and will only change if there is a change in taxation rates i.e. should VAT go up or down.
- The finance company is under no circumstances responsible for the quality or maintenance of the equipment or any warranty issues that may arise. Service and maintenance is your responsibility, warranty issues that of the manufacturer or supplier.
- The equipment does not belong to you during the term of the agreement, and therefore you may not sell it until such time clean title is transferred.
- You must keep the equipment insured under your insurance policy; if it is broken or stolen you will be liable for its replacement or repair.
- A minimal document fee is charged by the finance company and is payable with the first rental payment.
- Interest charges may be levied for late payment
- Always read the terms and conditions carefully before entering into any lease agreement.
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