Finance Options and Benefits
Finance Options
Treyfin Business Solutions provides finance for all office automation (new and used), IT equipment, computers and other hi-tech equipment. We offer innovative options and assist our clients in structuring the best possible deal. Treyfin’s objective is to add value to your finance solutions by providing cost effective structured rental options. We strive to remain competitive, approve transactions with minimal fuss and bother, and maintain the highest standard of business practice whilst adhering to sound lending principles. Treyfin provides finance options for all office automation (new and used), IT equipment, computers and other hi-tech equipment.
We offer innovative options and assist our clients in structuring the best possible deal. Treyfin’s objective is to add value to your finance solutions by providing cost effective structured rental options.
We strive to remain competitive, approve transactions with minimal fuss and bother, and maintain the highest standard of business practice whilst adhering to sound lending principles.
With Treyfin, we have embraced all the best features of operating rentals to provide you with a flexible, cost effective and viable mechanism to ensure that your organisation stays ahead in the technology race.
By using a rental, you will be retaining your working capital and therefore does not “use up” available credit lines leaving these free to finance revenue-producing assets. By using a rental you will be ensuring that you do not utilise existing finance facilities that may be limited. The VAT on a rental is raised on the monthly payment and is not capitalised “up front” as in Instalment Sales and/or Leases. This results in a saving of settlements/upgrades. Rentals are fully TAX deductible in the period in which they are incurred. This may enable you to “accelerate” depreciation on normally “long-term” assets.
There has been a longstanding tradition in most ICT departments to want to own the technology they deploy. Changes in both the economy and technology in recent years, however, are putting pressure on this tradition. Changing to an Opex model is more than an accounting manoeuvre, it brings about a fundamental change in the way IT and ICT is procured and financed.
Key difference: Who owns the technology and how it is financed; with Capex you own the asset. With Opex, someone else owns the technology and you just pay to use it. By getting long term ICT costs woven into annual Opex budget, they become positioned alongside other core costs of sale which can shift quickly to engage in new technology opportunities as they arise.
Finance Benefits
Cost Saving
By using a rental, you will be retaining your working capital and therefore does not “use up” available credit lines leaving these free to finance revenue-producing assets.
Additional Facility
By using a rental you will be ensuring that you do not utilise existing finance facilities that may be limited.
VAT Saving
The VAT on a rental is raised on the monthly payment and is not capitalised “up front” as in Instalment Sales and/or Leases. This results in a saving of settlements / upgrades.
TAX Advantages
Rentals are fully TAX deductible in the period in which they are incurred. This may enable you to “accelerate” depreciation on normally “long-term” assets.
Off Balance Sheet
The rental is accepted as an off balance sheet item for accounting purposes. This has a positive effect on balance sheet ratios and end of rental procedures. There is a saving of costly administration as fixed asset registers and depreciation schedules are not affected. You pay only for monthly usage of the equipment. This assists with budgeting and cost management. A rental can be structured to suit your needs and therefore start-up costs can be kept to a minimum.
Ease of Upgrading
The rental product caters for the addition of equipment or the replacement thereof on the same agreement.
Upgrade
Operating rentals ensure that an open and affordable upgrade path is available, keeping you abreast of changing technology. We also assist with funding shortfalls on settlements where the value of equipment traded in does not cover the settlement.
Repayment Option
We offer structured rentals paid monthly, quarterly or annually over 12 to 60 months, with escalations from 0% to 15% per annum, depending on the clients need and credit assessment. We also offer de-escalating rentals which can be used to structure for profitable companies who wish to be tax aggressive.
Ownership
Legislation governing rental agreements require that, in order for the full tax benefit to be enjoyed, the agreement may make no mention that ownership will pass at the end of the agreement. Treyfin will however facilitate the transfer of ownership at the end of the agreement subject to the fulfilment of statutory requirements at the time.
Credit Facility
Facilities for clients can be arranged, allowing the client to negotiate directly with the supplier of choice, comfortably in the knowledge that the rental facility is in place. This increases bargaining power as the client negotiates a “cash price”, while the dealer has the comfort of payment guarantees.
Financial Statements
Operating rentals are not shown on the balance sheet thereby reducing, gearing and the need to disclose “non-core assets”.
VAT
Operating rentals are fully deductible as an operating expense for all organisations registered for VAT. Use of operating rentals avoid adherence to onerous and time consuming requirement such as fixed asset registers, calculations of depreciation and scrapping values or recoupments on disposals Input VAT can be claimed on the monthly operating expense by all registered enterprises.
Cash Flow
Operating rentals preserve valuable cash resources, which can be better and more profitably applied elsewhere in the enterprise. It is surprising how many organisations will use valuable short-term funds such as overdrafts to fund asset requirements instead of applying the “pay for use” concept provided by the operating rental. Payment structures can be designed to accommodate most budget constraints using defendant finance facilities ensuring that your traditional banking facility is kept for main business activities.
