A Rent to own/Operating lease is essentially an additional source of asset credit (unsecured), thus freeing up funds for working capital.
Compared to the traditional method of buying and owning, rent to own gives your business more control over your changing needs. You have the flexibility to update to new equipment quickly and easily – even before the end of your rental term.
Greater flexibility and financial certainty, with no large upfront payment, ensures you can change, upgrade, re-capitalise and re-invest when you choose.
A rental facility can protect a client from being locked into owning equipment that may not meet their future needs.
Unlike other rental products offered in the market, Finance Connections provide clear end of term purchase options.
You can choose to take ownership of your equipment for one additional monthly payment or upgrade to a new product entering a new rental agreement if this better fulfils your needs.
- As the equipment is to be used predominately for work purposes, your rental payments will be tax deductible, making it a very cost effective way to pay.
- Your fixed rental payments are treated as an operating expense and are easily managed on a month-to-month basis, making accounting simple.
- As there is no deposit required, you simply pay the first month’s rental, then you take the equipment away. You are therefore spreading the cost of the equipment over its productive life.
Key features & benefits:
- No up front deposit required- 100% of the equipment purchase price is financed
- Off balance sheet- The monthly payments are treated as an operating expense and are considered 100% tax deductible (as long as the equipment is used for business purposes.)
- Fixed payments that are easily managed on a month-to-month basis.
- Preservation of working capital
- Flexible End of Term (EOT) Options…. It’s your choice. At the end of the rental term the lessee will have three alternatives.
- Upgrade or replace with new equipment.
- Purchase the equipment for one additional monthly payment (referred to as a purchase option agreement).
- Extend the rental period with reduced rental repayments.