FINANCE

 

YOUR ONE STOP SOLUTION TO FUNDING IN THE AGRICULTURAL SPACE

  • At Bolandagri Finance, we pride ourselves in offering leading-edge Asset Finance Solutions. Together, with Bolandagri Farming, we design tailor-made, tax efficient and cost effective financial solutions. Our accomplished specialist asset finance, credit and legal teams combine experience, expertise and a solid understanding of operational, financial and transactional complexities to offer you a range of Asset Finance products and solutions. We offer insightful advice, professional support and proven asset finance expertise to develop and expand your business operations while remaining cognisant of the need for stringent cash flow management to maximise productivity. We do this through an Operating Lease with ownership (rent to own) – The structure is the same as an operating lease but with the option to exercise ownership of the equipment at the end of the period at a pre-negotiated premium, it has the following main benefits:

 

  • What is an Operating Lease with ownership?     
    An operating lease is a term contract for the use of equipment during a fixed term, with ownership option and the end of term. Product therefore does not reflect in client`s asset register.

 

  • Why Operating Lease rather than Hire Purchase?
    An operating lease does not affect your balance sheet`s debt ratio, which means it has no impact on your other facilities such as over draft, production loans or bonds , it is Off Balance Sheet Funding.

 

  • What is value of product at end of term?            
    Value of product is determined by dealership that does trade-in, full value of product belongs to the client, this is the reason ownership option is given on contract.

 

  • What is benefit of 0% Deposit?
    Creates cash-flow, opportunity cost of capital is important for any business.

 

  • What is interest rate?
    Premium is calculated according a fixed rental premium, no interest rate is quoted, but due to VAT deductions and SARS deductions the nett cost on balance sheet over term is better than Prime rate.

 

  • How does VAT payment work?
    Vat is payable monthly on invoice, creating a better Vat claim over term.

 

  • Premium Terms.            
    Premiums are payable monthly or quarterly, normally in advance or arrears depending on client.   

 

  • TAX Benefits
    Premiums are 100% TAX DEDUCTIBLE as an Operating Expense over term, creating a better tax calculation that normal depreciation and interest claims.

 

  • Can I settle anytime?    
    Yes, settlement can be requested and will be calculated according to outstanding term.             

 

  • Who Pays Insurance and Maintenance?
    The client pays as per normal conditions for hire purchase

 

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