Rental
Rental is where by the financier purchases the equipment on behalf of the customer and rents it back to the customer over a fixed period of time.
Options:
The customer makes fixed monthly rental payments and at the end of the fixed term the customer can hand back the equipment to the financier with no further rentals, or continues the rental agreement or may buy the equipment outright at a market value price indicated by the financier.
Tax Claims:
The customer can claim 100% of the rental payments as a tax deduction when the equipment is used for business purposes.
(Refer to your tax accountant for all confirmation of current tax claims available).
BENEFITS:
- Fixed interest rates
- Flexible contract term
- Fixed monthly rental
- Costs are known in advance
- Some types of equipment have short life spans so the option of rental may be more cost effective than cash
- Full rental payment can be claimed as a tax deduction when the equipment is used for business purposes
- The rented equipment is not considered an asset so it is ‘off balance sheet’ and the debt is not considered a liability