Outright purchases traditionally have been the norm in South Africa, but all that is changing. Following international trends, South Africans are becoming more aware of various other solutions to furnishing your offices other than purchasing office furniture outright. Let’s have a closer look….
Outright-Purchasing
There is still good reason for some companies to purchase outright. Companies that have a cash flush business and are looking to expend cash will have a depreciating asset they can write off over a period of time.
However, for many other businesses where cash is required and better utilised as working capital, the lease rental and hiring solutions make financial sense as one can manage ones operational expense over a period of time without the big cash outlays – amongst other benefits.
Lease-Rental
With a lease rental you can gradually write off the cost of procuring office equipment over 3-5 years and avoid the big cash outlay required for purchasing equipment upfront.
In addition, you can write off the full monthly installment amount to tax as an operating expense and keep the furniture off your balance sheet which would otherwise be a depreciating asset. The tax saving offsets the interest if kept to a 3 year lease rental.
This convenient and flexible solution does require a credit application process where you will have to qualify for finance as you would for any financial institution. Speak to us for more information regarding this solution.
Lease-to-Own
This solution gives you all the benefits of a lease rental solution with the additional benefit of taking ownership of the equipment should you prefer not to upgrade at the end of the rental term.With the lease to own solution, ownership of the equipment is transferred at the end of the term for an additional settlement payment.