LEASING & RENTAL
Transtainer offer a range of leasing options because it improves your cash flow. Here we look at some business equipment finance options including:
- Fully maintained leases
- Renewable hire contracts
- Commercial leasing
- Operating leases
- Finance leases
- Hire purchase
Fully maintained equipment leases
With a fully maintained lease, the lender can build the cost of maintenance into the rental payments. With a normal equipment lease, you are financing the equipment over a term and the maintenance of the equipment is your responsibility. An example of Transtainers Fully Maintained Lease compliments the logistical large volume management of the:
- Container Maintenance of grease
Renewable Hire Contracts
Technology is changing quickly with equipment becoming redundant or expensive to maintain every year. Repairs and parts of some technology can be greater than the cost of buying the upgrade or a substitute. However technology is essential to gaining a commercial edge. Transtainer recommend the monthly hire of GPS and telemetry devices with 100% up time the responsibility of Transtainer for the:
- Battery replacement
- Firmware upgrades
- Hardware upgrades
- All warranty repairs and maintenance
- Swap non functioning units
Commercial leasing – monthly tax-deductible payments
With commercial leasing, instead of you paying for your business equipment, the lender does. They then lease the business equipment to you for a monthly tax-deductible rental payment.
Operating lease vs finance lease – what’s the difference?
With a commercial equipment lease, you have two options: an operating lease or a finance lease. At the end of a finance lease, the lender gives you the opportunity to purchase the goods for a previously agreed residual lump sum payment. In contrast, at the end of an operating lease, there is no liability to you for the residual payment. It is the responsibility of the lender to whom you return the equipment.
Operating lease vs finance lease – which is right for me?
Choosing between an operating lease and a finance lease depends on your situation. An operating lease is effectively a rental arrangement with no liability to you at the end of the term, whereas a finance lease has a residual amount that is your responsibility whether you retain goods or return them to the lender. There is also an accounting difference, with operating leases being off balance sheet, while finance leases are recorded on the business balance sheet.
Equipment leasing and hire purchase: what’s the difference?
Hire purchase is another way to finance capital equipment that doesn’t require you to pay the full purchase price up front. Commercial hire purchase is like a commercial lease in that you pay “rent” over the repayment term. The difference is that with hire purchase, you gain equity as you make payments and title passes to you with the last repayment. A hire purchase agreement can be structured with or without a “balloon” payment ie an additional lump sum payment to be made at the end of the lease.
Hire purchase – a different tax structure
One of the big differences between commercial leasing and hire purchase is in the handling of tax deductions. With hire purchase, instead of claiming the whole monthly payment as a tax deduction as you do with a lease, you claim the depreciation of the equipment and any interest charged. This tends to mean you will deduct more in the early years compared to a commercial lease.