|
Long
Term Rental
Operating Lease/Rental
Rental
is a relatively new form of financing, which enables
businesses to acquire new technology cost effective
rather than tying up cash. It also helps overcome equipment
obsolescence.
Rental
gives the customer all the benefits of the equipment
without the risks associated with ownership. The only
difference between rental (operating lease) and a normal
finance lease is that with a rental the financier accepts
the end of contract risk that the goods will be worth
the residual due. With a finance lease the borrower
guarantees that the goods will be worth the residual
value.
Key
Benefits of Rental
- Spread
the cost over the useful life of the equipment
- Conserve
your working capital
- Overcome
capital budgetary constraints and get more equipment
for your budget
- Greater
Flexibility
Rental
upgrade facility allows you to:
- Enhance
or modify your equipment with current technology
- Add
equipment components to the rental plan any time during
the rental period
- Increase
your systems size to meet growth in your business
operations
Off
Balance Sheet Funding
Unlike a loan or a finance lease, your rental agreement
does not appear on your balance sheet as a liability.
The monthly payments are simply treated as an operating
expense and are usually 100% tax deductible. Hence business
gearing and return on assets employed usually improves.
This can also improve your company's position when you
need to borrow.
End
of Term Options
Continue
to rent at the same rental amount or, re-rent for a
further fixed term at a reduced rental
- Upgrade
to the latest technology
- Return
equipment with no residual obligation
- Offer
to purchase the equipment at fair market value
|
