Leasing Information   ABS Digital   Tel: 01794 515511	Unit C1  The Premier Centre    Abbey Park   Romsey    Hampshire   SO51 9DQ
All the benefits without ownership
Finance leases give you immediate use of equipment for a small capital outlay.  Simply choose the asset you need and lease it at payments to suit your cash flow.
The leasing company (Abbey National) take legal ownership of the asset and rent it to you, allowing you to preserve your capital resources.
Any capital allowances are passed on to you, you can offset your rentals against taxable profits and you can also reclaim the VAT on your monthly payments.
Payments are structured to meet your needs and you won't always have to make an initial lump sum payment. You can extend the lease at the end of the rental period by paying an annual peppercorn rent.
This type of lease works well for assets with a low to medium monetary value, that depreciate quickly and have a short to medium working life, for example a computer
The Benefits
Capital efficient - helps preserve capital resources and reduce your working capital requirement
Cost-effective - we claim the Writing Down Allowances and pass them on you in the form of lower rentals
Flexible - payments can be structured to the pattern of your cash flow
Problem free - at the end of the lease you can continue renting the equipment by paying annual 'peppercorn' rentals.
Finance equipment for almost all types of business, voluntary or public sector organisation: -
Sole traders   Partnerships   Limited companies    PLCs    Local authorities    NHS trusts    Charities    Rural businesses
The only requirements are that you have been running profitably for more than 3 years. Equipment financed must be readily identifiable, recoverable and re saleable and must have a direct bearing on the running and profitability
Clarification of Terms
Capital Allowances These are tax allowances that the owner of equipment is able to claim back against taxable income. If your lease agreement allows you the option to purchase the asset, you can claim capital allowances. If however, the finance company retains ownership, they claim this allowance and usually pass on the benefit to you in the form of smaller rentals.
Peppercorn Rent Also known as 'secondary rental', this is a nominal (i.e. small) rent that you pay once the original term of your lease has expired.
Off Balance Sheet This is one of the benefits of operating leasing. The reason why "off-balance sheet" is attractive to some businesses is that it improves "gearing" which is the ratio between external borrowings ("debt") and the shareholders' capital ("equity"). Low gearing is generally regarded as good because, amongst other things, it means a lower vulnerability to increases in interest rates. It also improves "Return On Assets" which is the ratio between total assets in the business and profit. Clearly if the total assets reduce for a given level of profit then the ROA will increase.
Writing Down Allowance The proportion of the asset's cost which the owner of the asset may charge against taxable income each year.
Residual Value The estimated value of the equipment at the end of the agreement term
We would be happy to explain and expand on the information provided here.