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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% Financing 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
- Designed specifically for Schools and educational
establishments
- Payment profiles tailored to meet termly budgets
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@RICOH-PHOTOCOPIERS.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.
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