Leasing or renting an asset means you can free up working capital for use in other areas of your business and you do not need to take out large loans to pay for it. We advice our clients’ to consider leasing or renting equipments that requires high initial cash outlay, has high maintenance costs, can quickly become outdated, or is only used occasionally. Operating Lease gives the following advantages:
CASH FLOW RELIEF:
The negligible initial capital outlay required from Lessee and the fixed repayments tied to cashflow patterns help to ease cashflow constraints on the capital budget. Capital can then be employed for other profitable purposes. Fixed rental rates over the period implies that cash flow is predictable and better planned or budgeted for since lease rentals are known in advance.
OFF BALANCE SHEET FUNDING :
It enhances Return on Capital Employed-ROCE (Increases Profitability). Under the operating lease structure; usually referred to as “the off-balance sheet financing method”; leasing enables lessee to use productive assets without increasing its asset base. This enhances the balance sheet, as no asset or liability is shown and ROCE (Return on Capital Employed) increases. Lessee does not provide for depreciation expense in the Profit and Loss account, impacting positively on Net Profit.
REDUCED MAINTENANCE COST : Operating lease guarantees up to about 30-35% reduction in maintenance and service costs to Lessee’s benefit, due to the existing relationship Leasafric Ghana Limited has with the various garages as a leasing body.
MAXIMISES EFFECTIVENESS & EFFICIENCY :
Mandating a Leasing company with the required expertise to handle your transport system enhances efficiency and effectiveness. All distractions associated with fleet management are completely eliminated enabling company focus on its core operations.
Transfer of the risk of loss.
Because Lessee employs the operational strategy “mean and lean budget”, the company operates with a reduced asset base thereby enhancing its Key performance indicators (KPI’s).
COURTESY VEHICLES :
Routine services shall be sequenced and scheduled in such a way as not to disrupt the services of lessee. However, courtesy vehicles will be provided when:
Unlike dealing with bank loans and other alternative types of financing, leasing is an easy and convenient process.
Lessee does not need to provide any collateral to apply for finance lease and requires just a page application to set the ball rolling. This implies the client gets the vehicle quickly usually within a week and can easily add on to the lease.
Longer Lease term
Lessee gets the advantage of paying a structured pre- agreed amount for up to 36 months, which means that lessee is not affected in any way by the fluctuations on the cost of the vehicle or the interest rates on the market. This makes it much easier to project cash flow and budgets for planning purposes. Lessee gets to own the vehicle after the lease term by paying a token (Purchase Option).
Lower Insurance Rates
Leasafric ensures that lessee gets the best comprehensive insurance rate on the market which is an added advantage that we are offering to you.
Leasing preserves credit lines
Credit lines with banks and other depository institutions are precious and hard to establish. Conserve those lines for inventory, A/R or other uses and emergencies. Leasafric will take care of the financing for your capital equipment so that your lines of credit remain free.
Leasing is a hedge against inflation
Your cash savings can yield a return that fights inflationary pressures, lease and pay as and when you use the equipment.