How the Different Financing Options Work
Hire purchase: How it works
An agreement allowing you (the customer) to ‘hire’ the asset from SGEF (the Lessor) for an agreed term, in return for regular repayments. ‘Title’ (or ownership) is retained by SGEF until the final payment is made along with a normal ’Option to Purchase’ fee.
Fixed term rental: How it works
An agreement allowing you (the Lessee) to ‘use’ the asset for an agreed term in return for regular repayments. ‘Title’ (or ownership) is retained by Societe Generale Equipment Finance (the Lessor).
Operating leases may be ‘off balance sheet’ for some customers dependent on the accounting standards adopted by the customer.*
* This information is only relevant to those reporting under FRS 102 and not captured by the reporting requirements of IFRS 1.
Features of this Finance Option
- Ownership at the end of the agreement subject to a nominal ‘Option to Purchase’ fee
- As the full VAT amount is due on commencement of the agreement the repayments are not subject to VAT
- ‘On balance sheet’ financing agreement
- Capital Allowances can be claimed
- Payment structure agreed at the outset for easy budgeting
- Repayments can be matched to cash-flow and/or income stream
Features of this Finance Option
- Lower repayments than a Finance Lease as they are based on the asset cost over the lease term and assume a ‘Residual Value’ of the asset
- Rental and return conditions are known at the outset
- Removes disposal process
- Removes risk of asset depreciation
- Low capital outlay
- ‘Off balance sheet’ financing as rentals may be treated as an OPEX rather than CAPEX
- Depending upon the asset type and term, you customer may be able to offset the rental payments against your taxable profit*
- VAT is payable on the rentals, not on the purchase price of the equipment
- Repayments can be matched to cash flow and/or income stream
- We are also able to collect and distribute services and/or repair and maintenance payments enabling you, the customer, to manage the costs with one rental payment
* Please refer to your Accountant or Financial Advisor for confirmation.
End of Finance Term Options
Ownership can pass to the lessee upon payment of a nominal ‘Option to Purchase’ fee and/or income stream.
End of Finance Term Options
- Retain – agree extension rentals for another agreed term
- Return – hand back the equipment to us
Hire purchase financing examples
GA11 VSD+
- Price – £9,038 + VAT
- Deposit – VAT only
- 60 monthly payments of £190.04*
GA30 VSDs
- Price – £25,916 + VAT
- Deposit – VAT only
- 60 monthly payments of £544.92*
- *Not including maintenance
Fixed term rental financing examples
GA11 VSD+
- Price – £9,038 + VAT
- Service Cost per annum – £1,170
- 1+59 profile @ £261.38 per month*
GA30 VSDs
- Price – £25,916 + VAT
- Service Cost per annum – £1,450
- 1+59 profile @ £590.76 per month*
- *including maintenance
The examples shown are based on Atlas Copco’s Extended Warranty+ package which includes full servicing including parts and labour, call outs and breakdowns over the FTR period.
*certain restrictions apply
The financing examples shown are for comparison and illustration purposes only. See T&Cs below