Capsave Finance offers you a ‘pay for use’ model and invests its own equity as a residual component while structuring your cash flow, there by offering you the rentals that would be significantly lower than you would pay on other leases or on a hire purchase agreement. Our operating lease solution may be lower as compared to your weighted average cost of capital and any other mode of acquisition.
Under FMV Plan the cost of the asset is recovered from multiple lessees during the economic life of the asset after which Capsave Finance will arrange to recycle the equipment in accordance with environmental laws.
- Potential accounting and tax benefits – leasing turns the Equipment Rental costs into an expense item rather than an asset.
- Eliminates cash flow barriers as there is no upfront capital outlay and low periodic payments.
- Improved financial ratios such as liquidity and gearing, ROCE, EVA, Etc.
- Regular technology-refresh opportunity.
- Mid-term option to return the assets in exchange of new assets via our ‘Exchange Plan’.
- Reduces total cost of ownership.
- Cost of disposal is avoided.
- Preserves existing credit lines.
- Hedge against obsolescence.
An Example of how your Exchange Plan can work for you over time
Starting with a 3 year Rental Agreement
These figures based on a cone start payment and full utilization of the exchange plan. The amount available for exchange could vary with changes in interest rate.
This plan offer flexibility that cash purchases cannot and, in the unpredictable and ever-changing world of IT, this is a plus. “You’ll have to spend more cash to buy equipment that meets your needs. You are stuck with what you’ve got.” Capsave Finance offers an Exchange Plan which allows you to swap portions of your installed fleet through your rental fleet. If, for example, you have rented Rs1 million of equipment, after 12 months you can swap approximately 28% without increasing your payment. You just lengthen your rental period on that new equipment. “If you find that you have power uses who need more than just desktops you have rented, you can swap for the equipment that you need,” he says. “Another key factor is that you don’t have to swap like for like – you can swap IT equipment for office automation, or desktops or laptops.”
Salient Features of Sale and Lease Back
- You do away with ownership of those assets that are depreciating and induce a planned technology roll-out plan.
- You avoid booking of any capital loss associated with disposal of assets.
- You enjoy a cash infusion while still maintaining use of your technology.
- The surplus cash can be used for further expansion or to bring down the debt equity ratio affording additional borrowing capacity.
- Consolidate all assets under one single rental program and have a structured renewal plan.
- At the end of the lease you may simply return the assets or re-rent for further tenure at a negligible rate depending on the asset condition or your needs.
- Establish the written down value of assets
- Verify assets
- Sale and Rent back agreement signed
- Return obsolete equipment
- Acquire and install new equipment
- Cash Payments from Capsave Finance
- Commence paying rentals
Step Up Plan:
This is ideal for growing businesses where-in you may pay a small rental payment initially and instalment amounts increases as your contract progresses.
Step Down Plan:
This is ideal for cash injected businesses. Under Step-Down Plan, your initial rental payment is higher and decreases as your contract progresses. Under this plan you can lease equipment at a comparatively lower rate of interest.
As a supplier you might not want to impact your sales recognition, limit your own credit line usage required for core growth, do not want to manage the hassles of end-of-term rented asset disposal, or increase your business risks or carry residual risk positions.
Our outsourced rental solutions allow you to offer a competitive, market-leading solution to your clients, without having to invest in costly additional expertise or processes.
Whether you plan to introduce a new rental program, have your own existing rental book, currently work through a single or dual-funder solution or are frustrated by your current internal or external rental incumbent, we can offer you a solution tailored to meet your requirements.
We have an established, impeccable track record in setting up successful rental programs with leading local and international suppliers that will meet your needs and satisfy your clients enabling you to focus on selling and supporting your core product or service.
We have implemented and tailored a variety of business models to ensure you and your client requirements are met and the required outcomes are achieved. Models include informal opportunity-based alliances, using us as one of your rental partners, setting up a dedicated supplier program on an exclusive basis or a supplier-branded joint venture or even a separate company.
We guarantee full non-disclosure and confidentiality of information, including the business model, to ensure you retain your competitive advantage.
Our aims is to:
- Increase the value of your customer base by helping you win and retain more business.
- Enable you to present tailored and competitive finance packages to your customers.
- Provide you with fast turnaround of deals by outstanding customer service and support – helping you keep your customers happy.
- We believe in a partnership approach and can participate in customer visits, undertake joint marketing initiatives and even provide bespoke finance documents.
Our finance packages make it very easy for your customers to fund the equipment you are selling, making your product offering very difficult to beat and taking away the emphasis on price, allowing you to maintain margins.