The ability to upgrade is a key factor when determining whether to rent or buy the computing power you need.
Many companies today are faced with increasing change at an increasing rate, and this must be managed effectively in order to enjoy continued success. As technology advances, the risk inherent in purchase decisions increases, but by renting equipment through Multi Equipment, the risk can now be minimised. We offer flexible cost-effective rental solutions that allow each of our clients to keep up with the rapid pace of changing technology.
Essentially, Multi is able to provide you with the necessary tools to enhance your competitiveness in the marketplace, whilst simultaneously improving your financial status. Our finance options have a number of features and benefits – all with additional options that can be tailored to meet your individual business requirements.
What is an Operating Rental?
An operating rental is a cost-effective way of allowing a client the use of an asset without having to outlay the full purchase price upfront. This allows the client to retain cash for his working capital needs.
Why Finance IT from Multi?
Simply put we make it Fast and Easy, by being IT support and product providers first we can ensure that the IT you desire is right for you and works the way you want. We offer the complete Solution all from a single point which saves you time and money.
What Rental can do for You
The means to structure a payment plan to suit your cash-flow requirements.
Upgrade your equipment and keep up to date with the latest technology.
Avoid time consuming administration such as fixed asset register and depreciation schedules.
To keep your Long Term borrowings down, as rentals are reflected as an operating expense on your Income Statement and not on your Balance Sheet, thereby not affecting your Company’s gearing and credit worthiness.
To claim VAT back on your monthly rentals.
To enable urgent CAPEX investment purchases even when there is no CAPEX budget available.
Features and Advantages of a Rental
Rental payments can be structured to accommodate budgetary restrictions / financial constraints.
Rental helps you, the customer, to cater for and improve your cash flow.
You don’t have to have a big budget to buy it, only pay the monthly rental.
The Ability to operate the way all big businesses do.
Tax/VAT Benefits
VAT is not capitalized upfront but rather paid monthly with each rental.
VAT on the rental will be regarded as input VAT and may be claimed against any output VAT Collected.
Deposit and Credit Benefits
No deposit is required, thus reducing the client’s capital outlay.
By using rental as apposed to other funding methods, you will not be using your credit facility at your own bank.
What About the Balance Sheet?
Rentals are reflected as an operating expense in the Income Statement and not on the balance sheet
No bank can offer “off balance sheet” finance direct to clients.
Upgrading
A Big Benefit of Renting is that it provides the flexibility to change or add as technology improves, or as the site or business expands.
Your Rental Options
Rentals can be structured around the clients particular cash flow requirements including stepped payments.
Escalation options of 0%, 10%, 12% and 15% per anum are available.
Monthly rentals can be reduced by use of escalation options, therefore easing the client’s immediate cash flow.
Terms are 36, 48, and 60 months.
Minimized Administration
Rentals are collected from the client’s bank account via debit order, thereby reducing the administration burden.
Anything else you might want to know
You, the customer, can now enjoy the full use of equipment at the lowest cost possible.
You can now enjoy the best, top of the range equipment by renting.
We are here to offer solutions for all your financing needs.
Above-mentioned advantages derived from the rental, automatically increases the overall business value of the Organisation. Should equipment that is rented by the customer be used operationally as a core business service , the equipment or product indirectly ‘pays” for itself and the above-mentioned advantages derived from the rental, automatically increases the overall business value of the Organisation.
The IT we Finance
Tablets
Desktops
Laptops
Monitors
Servers
Networking Equipment
UPS
Printers
Multi Function Printers
Telephone Systems
VoIP Systems
Audio Visual
POS
Software
Cyberoam Units
Security Equipment
The Full Benefits of Renting, Leasing and Installment Purchases Explained
| Installment Sale | Rental | Lease | |
|---|---|---|---|
| Definition | An agreement whereby the bank purchases a durable asset on behalf of the client, who pays for the item together with finance charges over an agreed period. | A contractual obligation conveying the right to use an asset for an agreed period of time in return for a series of payments by the user. | An agreement whereby the bank allows the client the use of the asset for a specified period, in return for a series of cash payments, which includes finance charges and transfers substantially all the risk and rewards associated with ownership. |
| Deposit/Initial Payment | Negotiable to suit our customer needs. | All initial rentals may be negotiated to suit our customer needs. | Negotiable to suit our customer needs. |
| Ownership | Secured by Multi, After Final payment, owner passes to credit receiver. | The hirer retains ownership of the asset. | Owned by Multi. Ownership can be obtained at the end of the lease agreement at a price lower than market related prices. |
| Assets | Such as airplanes, plant machinery and equipment, generally non income generating. | Such as airplanes, plant machinery and equipment, generally non income generating. | Such as airplanes, plant machinery and equipment, generally non income generating. |
| Payments | Flexible- Monthly/Quarterly/Half Yearly/ Annual/Structured Payment. | Flexible- Monthly/Quarterly/Half Yearly/ Annual/Structured Payment. | Flexible- Monthly/Quarterly/Half Yearly/ Annual/Structured Payment. |
| Period | Non-statutory limit. Generally 60 months maximum. | Generally 60 months maximum or the depreciable life of the asset. | Non-statutory limit. Generally 60 months maximum. |
| VAT | Capitalized and included in the agreement. The client may in most cases claim an input credit in respect of VAT. | Payable on each monthly rental. The client may claim an input credit in respect of VAT. | Capitalized and included in the agreement. The client may in most cases claim an input credit in respect of VAT. |
| Taxation | Business users: Wear and tear and interest deductible from taxable income. | Business users: Total ex VAT rental can be deducted from income statement. | Business users: Total rental can be deducted from income. |
| End of Agreement | Ownership passes automatically to client. | Assets are returned to the Rentor. A secondary rental may be taken out or negotiations for ownership conducted | Assets can be returned to the bank, purchased, sold to third party or a secondary lease may be taken out. |
| Tax Liability | On termination there are no income tax implications, however, on the disposal of the asset there may be a re-comment where the sales proceeds exceed the depreciation value of the asset | Applicable when: The hirer obtains ownership. | Applicable when: The lessee obtains ownership at below market/ deemed value. Proceeds on disposal are rebated to lessee Lease extended at a rental less than 10%, deemed value |
| Balance Sheet Implications | Asset is capitalized and reflects on the balance sheet. | No long-term liability is reflected. As a rental is a contingent liability. | Asset is capitalized according to GAAP and the liability is reflected on the balance sheet. |
| Residual Value/ Balloon Payments | Can be negotiated with bank dependent on the type of asset purchased. | Can be negotiated. | Can be negotiated with bank dependent on the type of asset purchased. |
| Interest Rate | Market related (negotiable). Aim to provide products that enable customers to manage their own interest rate risk. Linked to Bank Prime Overdraft rate or BA Rate. Fixed rate and shortly able to offer interest rate derivatives. | Market related (negotiable). Aim to provide products that enable customers to manage their own interest rate risk. Linked to the Prime Overdraft Rate or derivatives. Dependant on client, amount and asset. | Market related (negotiable). Aim to provide products that enable customers to manage their own interest rate risk. Linked to Bank Prime Overdraft rate or BA Rate. Fixed rate and shortly able to offer interest rate derivatives. |
