Leasing facts and why lease?|
Leasing rather than owning their property allows companies to produce a better operating performance.
Companies who own equipment have to scratch around to find the cash to pay off debts or to invest, but companies who rent benefit from the better financial flexibility offered by the cash released from not owning there equipment. The research highlighted the possibility that, since leasing is a substitute to debt financing and conserves cash, many companies can avoid bankruptcy by leasing their equipment. Also there is a slower growth for companies that own their equipment. The research also reveals that the leasing is positively related to a company's growth.
Spread the cost of your next IT purchase: Keep your hard earned money in the business. Buy Assets that appreciate: IT depreciates faster than 90% of all the assets you purchase. Would you pay an employee in advance for three years work upfront? So let your IT pay for itself. Finance makes more equipment available. Get the equipment you need, when you need it, don't be restrained by budget. Finance improves your cash flow. Finance makes equipment earn its keep. Finance can be a hedge against inflation, Depreciation and Obsolescence. Finance Leases offer 100% tax advantages.
Leasing is the most tax advantageous way of procuring IT equipment. It offers the most flexibility and allows you to purchase what you need when you need it.
A popular Choice
Over £2.4 billion of IT equipment was financed in the UK last Year.
Nature of the Assets
Office and IT equipment are part of the every day running of a business. Financing has been commonplace in the copier and car industry for years.
IT depreciates so quickly and the technology becomes obsolete even faster which in turn means that your money is could be best used elsewhere inside your business.
Money Makes Money so why spend it on IT. Invest it, recruit somebody, and add it to your marketing budget put it in a high interest account. Use the capital spends to enhance your business.
Return on Investment
Let the new equipment provide you with a return, the reason you bought the equipment was to increase productivity so use the cost saving to make the payments.
Spread the Payments
Tailor make the agreement to suit your company's cash flow. Pay monthly or quarterly, and spread the payment over a period from 18 months to 5 years.
Don't effect Your Credit Lines
Leasing the equipment through FCSF will not affect your bank credit lines. You will always be able to hold on to the relationship with your bank for a rainy day.
Over the period your payments will not change and they will be protected from inflation. Then you will be able to help your business forecast its cash flow.
There is many benefits to leasing an item of office equipment - below is a list of the 16 top reasons to lease rather than purchase outright.
Saves working capital
Leasing allows you to save resources for other purposes
Payments made throughout a lease arrangement are not affected by changes in interest rates. You can accurately plan for lease payments in advance.
Future credit line
When leasing equipment your existing credit lines, such as arrangements with the bank, remain intact.
The original installation can be altered, either during or at the end of the lease, to accommodate unforeseen changes.
If you pay corporation tax, leasing payments may be deducted from taxable profits, which reduces the net cost of leasing the equipment.
Making leasing payments by direct debit helps you avoid unnecessary time organising payment for equipment rental invoices.
A deposit need not be a prerequisite to the finance arrangement.
Leasing helps spread the cost of using equipment over a pre-agreed period by making regular (usually quarterly) payments instead of a large capital outlay.
Don't let your cash flow stop you getting what you need - use finance to justify it. Require an upgrade but need to get it signed off by the board - use finance to justify it. With a lease agreement from FCSF you can always add to your lease agreement.
Give the equipment back at the end of the agreement and upgrade all of your IT for the same rental. The pace of development in IT means computer users like you have to upgrade their computers - and their funding arrangements - more frequently than ever before. This is when funding through FCSF comes into is own. All our finance packages are designed to release spare funding capacity as the agreement progresses. You can make use of that capacity by acquiring new equipment without an increase in monthly payments. We call this the systems change options. The diagram shows the spare funding available at the end of each quarter on a typical three-year funding agreement. In this way, your existing equipment can be exchanged for new, keeping your system at the forefront of technology without increasing your monthly payments.
Leasing is a contract between the leasing company, the "lessor", and the customer, the "lessee"; The leasing company buys and owns the asset that the lessee requires The customer hires the asset from the leasing company and pays rental over a pre-determined period for the use of the asset The leasing company can sometimes claim capital allowances on the assets. These benefits are usually passed onto the lessee in the form of reduced repayments. There are two types of leases: Finance Leases and Operating Leases
Under a finance lease the rental covers virtually all of the costs of the asset; therefore the value of the rental is equal to or greater than 90% of the cost of the asset.
The leasing company claims written down allowances, whilst the customer can claim both tax relief and VAT on rentals paid.
A lease purchase is essentially the same as HP; the main difference is in the terms and structure of repayments. Some finance companies differentiate Lease Purchase from Hire Purchase by using it where the customer wishes to defer payment of a substantial part of the asset cost until the end of the agreement.