This is a rental agreement which can be used to finance a broad spread of business assets but is particularly effective for financing heavy commercial vehicles for the haulage industry. The Funder builds in a residual value to reduce the rentals, thus helping cash flow and making “off balance sheet” funding possible.
Key Features and benefits:
- Preserves cashflow – offers the obvious cashflow benefits of paying in instalments.
- Initial deposits can be as low as one monthly rental down with the VAT spread over the term of the agreement.
- Competitively priced – the Funder or manufacturer takes the risk in the residual value of the equipment and factors this into the rental, bringing down the periodic cost to you.
- Fixed maintenance contracts can also be built in to the monthly rental.
- Tax efficient – the rentals can normally be offset against taxable profits.
- Asset normally treated as “off-balance sheet” (subject to your auditors’ approval).
- Flexible – at the end of the term you can return the asset or extend the period. Either way you do not carry the problem of disposal of the equipment.