FINANCE
OPTION 3
RENTAL ** An Operating Lease/Hiring Agreement (off balance sheet)
- Term 12 - 60 months
- Off balance sheet finance arrangement
- Rentals are Tax Deductible
- Ability to upgrade goods at or before contract expiry and renegotiate terms
- Lease Expiry Options include purchase, re-rent, return of goods
- Amount financed is net of GST
- GST charged on monthly rentals (ITC available to ABN entities reg’d for GST)
Benefits versus Cash Payment - Sometimes preferred by high end corporate or public companies as finance does not impact on the Lessees Balance Sheet.
- Conserves cash flow spreading expenditure over the term of the lease and compares favourably to traditional bank finance via mortgage or purchase finance facilities where the fixtures and fittings would depreciate over a 13 year period.
** Where premises are tenanted, term of loan agreement can not exceed Tenant lease period (including options).
