What is a rental
A rental is a cost effective and flexible way of allowing a client to use an asset without having to outlay the full purchase price up-front.
Period of rental
The client can enter into a rental over various periods, ie. 60, 48 or 36 months. The rentals are linked to prime and are subject to increase or decrease as the prime rate increases or decreases. There is also an escalation option of 0% and 10% where the rental will increase on an annual basis depending on the escalation chosen and the size of the transaction. If the client has chosen a 0% escalation the rental will not escalate on an annual basis.
Payment structure
Rentals can also be calculated in advance (first rental payable on signature) or arrears (first rental payable one month after signature). Rentals can be specifically structured to suit the user’s requirements.
In normal business a rental will be signed on a monthly basis which means the client have to pay the rental on a monthly basis via debit order or cheque but the options of quarterly, half-yearly or yearly payments are also available. However, these payment plans are usually only advised for schools, some government departments and blue-chip companies.
Ownership
By renting assets it enables the client to track technology through upgrading their equipment. Ownership of the equipment belongs to the lessor and not the client. If the client or dealer would like to have ownership at the end of the contract an arrangement will have to be entered into with the client or dealer where the price/value of the equipment is calculated by the lessor.
Taxation
The VAT on the rental is claimed on a monthly basis.
Secondary rentals
Should the client wish to continue renting the equipment after the expiry of the contract, the rentals can be negotiated.
Settlements
If the client wants to cancel the rental agreement a settlement is quoted which has to be paid to the lessor/bank.
Interest rates
Interest rates are not applicable on rentals as rentals are negotiated for use and upgrade of equipment.