Renting conserves your cash and working capital. Cash is not tied
up in equipment. Instead, money is available for opportunities such as
marketing, working capital, or seasonal cash flow needs.
I already have credit lines in place, why do I need to rent?
Renting is ‘off balance sheet financing’ and therefore does not
appear as a debt on your balance sheet. Your existing lines of credit
and borrowing availability are left untouched, ready to use for
operational and short-term financing needs.
Is there any tax advantage when renting?
Renting may provide a variety of tax advantages. When you acquire
equipment, the goods are used to earn assessable income, both the
interest paid, and the depreciation of the equipment may be tax
deductible.For example computer equipment with a purchase value of
$5,000 rented over 36 months (after typical company tax deductions of
30% are applied), will cost the business approximately $4,238.00 over
the term. See your accountant for further advice.
We operate on a tight budget, how can renting help?
Renting overcomes budget limitations. In situations where limited
budgets would ordinarily delay or prevent the acquisition of equipment
due to a limit on capital expenditures, leasing allows for quick budget
approval due to its small monthly expense. A lease can fit the tightest
of budgetary constraints.
What is the interest rate?
The agreement is a rental agreement; not a loan or hire purchase agreement, therefore you pay a monthly rental amount for the equipment, not interest
What is the duration of rental term?
You can rent from 24 – 48 months, depending on the equipment and
your requirements. Many clients elect to rent for 4 years knowing that
the monthly payments have a minimal effect on cash flow and they can
upgrade before the end of the term.
What happens at the end of the rental agreement?
At the end of the term of the agreement, you have several options. You can:
Upgrade the equipment under a new rental agreement
Continue to rent the equipment on a casual basis
Rent for a further specified term at a reduced rental
Return the goods with no further obligation
Offer to purchase the goods
What if I want to upgrade before the end of the rental agreement?
Renting eliminates equipment obsolescence. Renting lets you
regularly upgrade your equipment to a state-of-the-art level,
eliminating the inefficiencies of owning out-dated equipment.
How does renting over come budget limitations?
In situations where limited budgets would ordinarily delay or
prevent the acquisition of equipment due to a limit on capital
expenditures, renting allows for off balance sheet budget approval. A
lease can fit the tightest of budgetary constraints.
Who else is renting equipment?
Eight out of ten businesses use leasing to acquire equipment.
Renting is a smarter lease that is well suited to equipment with a
short shelf life, such as computers.
