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Leasing is a contract
between the funder (lessor) and the end
user (the lessee) for the acquisition
and use of an asset and/or solution and
any associated costs, such as
maintenance.
The lessee selects the asset required
and we (the lessor) buy the asset,
usually via the supplier but sometimes
direct from the end user client. The
lessee then makes a series of payments
(usually monthly or quarterly) to the
lessor over a defined period of years,
in return for which they have the right
to use the equipment. The lease term is
normally set to reflect the underlying
asset's expected useful life.
The benefits to you
Conserves cash reserves - leasing
enables you to secure the equipment
solution most suited to your business,
without making a substantial lump sum
cash payment, which could be used to
better effect elsewhere in the business.
Maintains credit lines for other use
- acquire the solution you need without
affecting other credit lines, such as
loans and overdrafts. This ensures that
further borrowing, if required, will be
easier.
Improved cash flow - spread the
cost over a number of regular payments.
Payments can be set to match individual
requirements, including seasonal cash
flow circumstances.
Fixed payments - payments are
fixed for the term of the contract,
protecting your business from the
effects of changing interest rates.
Knowing the amount of future payments
enables more accurate budgeting and cash
flow projections. And because payments
are fixed the true cost of leasing
diminishes over time as the value of
money depreciates.
Tailored payment profiles –
payments can be arranged to meet
individual budgets, roll-out schedules
and/or cash flow requirements.
Tax advantages – leasing payments
may be offset against taxable profits
reducing the net cost of leasing the
equipment.
Technological change - The
flexibility of a lease allows you to
upgrade to more advanced or appropriate
solutions as your business needs
dictate. In many cases this can be
achieved without an increase in monthly
or quarterly payments.
Choose the solution you need -
when you lease you are not limited to
acquiring only what you can afford to
pay at the time. Monthly payments enable
you to select the solution which is most
beneficial for your business at the time
you most need it.
Easy equipment disposal - by
returning used equipment to the lessor
at the end of the lease term, you do not
need to be concerned about disposal
issues or costs.
100% Finance - in most cases, all
of the costs of the asset or equipment
installation can be catered for in your
leasing arrangement, including all
hardware, software, installation and
maintenance costs. Equipment and
services from a variety of suppliers can
be financed and rolled up into a single
simple arrangement - simplifying your
administration and streamlining your
payments.
Administrative ease - payments
can be made by direct debit, minimizing
the administration required of you.
Types
of Agreement we can offer:
Fixed Term Lease Agreement
-
Agreement runs for
maximum of fixed period with no
extension option.
-
Applicable to both
regulated and non-regulated
customers
-
Facility is
on-balance sheet
-
Variable payment
methods and profiles available
-
Also known as,
Rental, Lease, Lease Rental, Fixed
Term Lease Rental
Minimum Period Lease
Agreement
-
Agreement runs for a
minimum term
-
Secondary period
extension option
-
Facility is
on-balance sheet
-
Also known as,
Rental, Lease Rental, Minimum Term
Lease
Edulease
Master Lease
-
Minimum Order value
£50,000
-
Provides credit
facility for draw-down
-
Only one set of
Terms & Conditions signed
-
Fixed Term or
Minimum Term available
-
Provides easy
Customer Purchase Order-type
ordering
-
Allows for easy
budgeting
-
Simplifies
negotiations
-
Applicable to Larger
nationwide companies and Local
Authorities
Technology Re-fresh
-
Applicable mainly
for the finance of IT installs
-
Overcomes technology
obsolescence
-
Customer can upgrade
without impacting monthly/quarterly
payments
Leasing versus other funding options
There are many advantages to leasing
when compared with other financing
alternatives.
Cash
- Outright purchase has an immediate
impact on cash flow. This is not the
case with leasing
- The cash is tied into the asset and
cannot be used elsewhere in the
business. Leasing ensures the cash is
available to be used to better effect
elsewhere in the business
- The asset(s) is shown on the balance
sheet whereas some types of lease are
off balance sheet
- Writing down allowances are only
claimable each year at a 25% rate on a
reducing balance basis; leasing payments
are 100% offset against taxable profits
- Outright cash purchase can reduce your
flexibility to upgrade and add to your
equipment as technology and your
business needs change as you are
dependent on future cash reserves.
Leasing ensures total flexibility
regardless of immediately available cash
reserves
Loan
- Using a loan will use up some of your
available credit and impact on your
ability to obtain or increase any
overdraft or current loan to fund
working capital in the future
- The asset(s) is shown on the balance
sheet whereas some types of lease are
off balance sheet
- The lender may ask for additional
security - e.g. a debenture over book
debt or a charge over a freehold
property, where as a lease is always
only ever secured on the asset in
question
- Loans may be repayable on demand,
whereas a lessor cannot 'foreclose' on
the transaction whilst payments continue
to be made
- Only the interest element on loans and
writing down allowances are claimable
against tax, whereas 100% of leasing
payments may be offset against taxable
profits
Overdraft
- An overdraft is a short term finance
facility to fund working capital, not
asset acquisition, and is therefore less
appropriate for buying technology
- As with a loan an overdraft will use
up some of your available credit and
impact on your ability to obtain or
increase an overdraft to fund working
capital in the future
- Interest is normally variable and
calculated daily - lease payments are
fixed and allow for easier budgeting
- Just as with a loan, repayment on an
overdraft is on demand. Lessors will not
foreclose on the arrangement whilst the
lessee continues to make payments
- The asset is shown on the balance
sheet - some types of lease do not
require this
FAQs
Q. How do I arrange finance?
A. You can contact us directly by
telephone 020 7231
3536, fax
020 7237 2344 or by e-mail
SALES@MURATEC-ABT.CO.UK
Q. Why should we use leasing rather than
pay cash or use a loan?
A. Your cash may be better used
elsewhere in the organisation,
particularly as working capital helping
to develop the business, rather than
financing fixed assets.
Q. What kind of equipment can be
financed using leasing?
A. Almost any capital equipment can be
financed using leasing; from IT and
telecoms equipment, to software and
electronics; from dental chairs and
medical scanners to wheelie bins and
snow ploughs including plastic extrusion
machines and laser etching tools. Nearly
any asset required to improve the
efficiency of, as well as develop and
grow, your business can be leased by
Siemens.
Q. What value of equipment can I finance
with Siemens?
A. Assets with a value from as little as
£1,000 can be financed.
Q. How long will my finance agreement be
for?
A. There is a wide range of leasing
terms available which can be tailored to
suit you, so long as the term does not
exceed the expected useful working life
of the equipment.
Q. How often do I make payments under my
finance agreement?
A. Most clients choose to pay monthly or
quarterly, but payment structures can be
arranged to suit each individual
clients' requirements.
Q. How do I make payments to Siemens?
A. Most clients choose the convenience
of a direct debit arrangement or a
standing order.
Q. When do I make my first payment to
Siemens?
A. This will be normally on the date on
the agreement or according to the date
of any acceptance certificate.
Q. What happens to the equipment at the
end of the finance arrangement?
A. It depends on the type of finance
arrangement you choose. With a lease
agreement you can choose either to
continue leasing the equipment for a
secondary period, arrange for an
up-to-date replacement to be installed
as part of a new agreement or simply
return the equipment to the lessor. At
the end of a lease purchase agreement
you have the option to buy the equipment
for a final, nominal sum.
Q. If we want to add, change or replace
the equipment during the lease, what
happens?
A. Changes to equipment requirements can
be easily accommodated by Siemens via
our upgrade and add-on options. A simple
adjustment to your payments will make
this process easy.
Q. Siemens are members of the Finance
and Leasing Association. How does this
benefit me?
A. You have the reassurance that Siemens
abides by the Association's Code of
Practice. The Code is designed to ensure
clarity of information regarding the
finance arrangement and a set of
guidelines to ensure a fair deal.
Q. Do the leasing payments cover the VAT
element of the cost of equipment?
A. Yes, you pay VAT on the payments as
they fall due, rather than pay the VAT
up front in full as you would do when
you purchase equipment.
Q. Who is responsible for insuring the
equipment?
A. As the lessee, you are responsible
for insuring the equipment against loss
and damage. You should make sure that
the equipment is insured with a
reputable company and for the full
replacement cost. You may be required to
produce evidence of the insurance
policy.
Q. What do I do if I want to end the
finance agreement early and how much
notice do you require?
A. You should inform us of your early
termination request in writing and we
will quote you a settlement figure based
on early termination. Normally you will
be required to give 90 days notice of
early termination. |
