We offer lease purchase agreements with a final repayment of capital, sometimes called “balloon payment”. This means that repayments are much lower during the initially agreed term. The long life of the asset often means that at the end of the initial term there is value and the equipment can be sold or exchanged for a new asset to repay the final amount of the principal repayment. Or you can simply pay the final amount of capital with the call option and the equipment belongs to you. The oil and gas industry does not distinguish between an asset and a share purchase when designating the associated sales contract. In this sector, whether it is a purchase of assets or shares, the final agreement is called a purchase and sale agreement (PSA). An item purchased with the rental financing model is immediately a fixed asset of your business and, as such, you can claim the capital premiums, with ownership transferred to you after the liquidation of a definitive call option, normally payable in the last instalment. If VAT has to be paid on the purchase price, it is calculated in advance at the beginning of the contract as if a direct purchase had taken place. Since the rental purchase allocates the costs of a capital purchase, repayments attract a level of interest rate (which you can claim as a commercial issue) and you thus pay over the term of the contract more than the initial “cash price” of the item. However, as we support businesses with our own money and a number of flexible funds that we manage on behalf of others, we can often beat traditional loan rates or offer more flexible repayment terms and cycles to meet your unique needs and circumstances. Choosing the form of an acquisition transaction can have significant tax and other business consequences for buyers and sellers. Both parties should consider the benefits and consequences of any type of transaction with the assistance of professional financial advisors to determine whether the asset purchase or share purchase transaction best fits their wishes and needs.
Rental buying helps growing businesses acquire large-scale equipment that is essential to their operations, but is often inaccessible in terms of the cost of capital. With a rental agreement, you can enjoy using the item while paying in financially manageable stages. All of our leases are a fixed interest rate and a fixed term, so you don`t have any hidden raises and can budget efficiently. An asset purchase agreement (APA) is an agreement between a buyer and a seller that enters into the terms of buying and selling a company`s assets. [1] [2] It is important to note, during an APA transaction, that it is not necessary for the buyer to purchase all of the company`s assets. In fact, it is common for a buyer to exclude certain assets in an APA. The provisions of an APA can be the payment of the purchase price, monthly payments, deposits and charges on assets, conditions precedent for conclusion, etc. 3.
[3] An APA is different from a share sale agreement (SPA) which also sells business shares, ownership of assets and ownership of liabilities. [2] In an APA, the buyer must select certain assets and avoid redundant assets. These assets are broken down in a calendar for the APA. The buyer in a SPA buys shares of the company. In this case, the breakdown is not necessary, because the transfer of ownership of the company is done as it is. The APA is the legal mechanism for the implementation of a merger or acquisition of companies. [1] To discuss leasing as a way to finance a significant acquisition for your business, please contact us today. Rental purchase is used regularly to finance major purchases with an expected working life longer than the financing period, such as construction machinery, vehicles, machinery and large IT infrastructures.
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