Operating Lease (Rental)

Need to upgrade your business equipment but are worried about capital expenditure and obsolescence? Then a Finance Rental agreement is just what you need.

 A Finance Rental agreement provides a cost effective solution to businesses looking to finance their next photocopier, phone system, computer etc. A rental agreement can overcome the large up-front capital investment required to update a phone system, office computers, furniture and much more. With a monthly payment schedule, a rental agreement overcomes large capital outlays and makes budgeting easier. A rental agreement may count as off balance sheet financing, avoiding the equity accounting calculations applicable to other forms of financing. The tax benefits do not end there with rentals, as the monthly payments maybe tax deductible. If the asset is used solely for business purposes, these monthly payments may be tax deductible*. Also, GST incurred through your payments can be recorded on your Business Activity Statement. You will not risk being stuck with old technology at the end of the term as there are numerous options available; Upgrade to new technology, extend the contract ,make an offer to purchase, continue to rent on a month to month basis, or return the equipment with no residual obligation, are all end of term options, designed to meet the needs of your business.

Rental – How does it work?

Rental is a funding arrangement where the applicant pays an agreed rental to use the equipment without any obligation to purchase. At the end of the agreement one of the following can occur: 1) the equipment can be purchased for a negotiated amount 2) the equipment can be returned to the financier or 3) the equipment can continue to be rented by the client Note: a rental facility is off balance sheet for accounting purposes.

Rental – Key Benefits

  • Reduced risk of financial loss due to technological obsolescence
  • Payments are fully tax deductible.
  • For Government bodies repayments are treated as operating expenditure and not included in capital expenditure budgets.
  • Client has no risk for the re-sale of equipment; however, equipment can be purchased subject to negotiations.
  • Payments are fixed for the term of the agreement.
  • Maintenance and service can also be included in a rental agreement

Some of the assets that we finance include:

Agriculture Audio Visual equipment Bus & Coach Boats (Marine)
Butchery Equipment Coffee Machines Cars Cranes Concrete pumping eqip
Earth moving equip Forklifts Food processing equip Fitout (Hospitality & franchise)
Poker machines (Gaming) IT hardware Motor vehicles Mining equipment Medical equipment
Office equipment Photocopiers Point of sale systems Trucks & Trailers Telephone systems (VOIP & PABX) Vending machines