
- +27 12 548 6028
- info@franchisetech.co.za
- Mon - Fri: 8:00 - 16:00
- Franchise Tech IT Support
Finance or Rent your new PABX, CCTV, Digital Signage or IT infrastructure.
Companies need to proactively deal with the rapid changes going on in the world and implement new technologies to improve business systems to keep customers happy and stay ahead of competitors.
Conserve your company’s cash flow by avoiding large upfront capital purchases with Financing Options & FTS Franchise Rentals available.
More and more companies are financing or renting their IT equipment from Financing & Rental companies. Not only can this minimize the risks that firms have to deal with, but it also makes the process of upgrading IT equipment significantly lower.
FTS offers a flexible Rental solutions for Franchise Companies on IT equipment, while also allowing Franchises to keep up with the pace in the world’s rapidly developing technology.
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Traditional installment sale | Rental | |
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Explanation | An agreement whereby the bank finances the clients’ purchases of durable assets (e.g. cars, laptops, tools, etc.), and the clients, in turn, confirm their promise to pay for these assets along with the bank’s financial charges over a specific period of time. | An agreement whereby the owner agrees to pay a series of monthly payments for the right to use IT assets for a specified period of time. |
Assets | Typically, non-income generating assets, for instance, servers, CCTV, PABX other IT equipment. | Such non-income generating assets as servers, CCTV, PABX other IT equipment. |
Initial payment / Deposit | Negotiable to fit our clients’ expectations | Any initial rental may be negotiable to meet our clients’ demands |
Title of ownership | Protected by the bank. When the credit amount is fully repaid, the ownership is transferred to the client instantly. | The renter transfers ownership of the asset to the legal owner at the end of term. |
Payment terms | All payments are flexible and structured. The clients can pay to the bank on a monthly, quarterly, half-yearly or annual basis. | Flexible and structured payments. The renters can pay to the owner on a monthly, quarterly, half-yearly or annual basis. |
Period | There are non-statutory time limits up to 60 months. | Within 60 months or the period of time during which a rental asset can be depreciated |
End of Agreement | Ownership is transferred automatically to the client. | The legal owners get their assets back. The hirer can take out a secondary rental or negotiate for full ownership. |
Taxation | For business users, interest and wear-and-tear can be deducted from their taxable income. | Total (excl. VAT) rental deductible from income statement for business users. |
VAT | The Value Added Tax is capitalized and reflected in the credit agreement. In some cases, the clients can claim a credit for the VAT charges. | The Value Added Tax is due and payable on each monthly rental. Normally, the clients may claim an input credit for the VAT charges. |
Tax Liabilities | After the end of the agreement, there is no income tax implication. In some cases, when the sale proceeds are higher than the depreciated cost of the asset, there may be a recoupment. | May be applicable when the renter obtains ownership. |
Balance Sheet Implications | An asset is capitalized and listed on the balance sheet. | As a rental is a contingent liability and contingent asset, no long-term liability is recorded. |
Balloon Payments/Residual Value | Depending on the type of purchased asset, the balloon amount can be discussed with the bank. | Residual value can be negotiated with the owner. |
Interest Rate | The interest rate is a market-related rate that is linked to BA rate or the prime lending rate. Generally fixed. | Depending on the client, rental amount, and type of asset, this rate is negotiable and market-related. Linked to the interest rate derivatives or prime lending rate. |
Contact Number: 012 548 6028
Address: Cnr Braam Pretorius & Vinko Street, Sinoville Corner Centre, Office 4, 2nd Floor, Sinoville, Gauteng 0182
Email: info@franchisetech.co.za
© Copyright 2019 Franchise Tech Solutions. Designed and developed by A. Holtzhausen