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Buying Versus Renting

CWCSA offers great flexibility in financial solutions for Businesses to acquire a weighbridge/scale or a management solution. Each option has advantages and the choice depends on the individual circumstances of the Business. Briefly, these options are:

  • Rental
  • Cash Purchase
  • Installment Sale
  • Rental then Buy

RENTAL (Commentary)

Working Capital

Many businesses need to maintain their working capital and do not necessarily want capital equipment on their balance sheets. The requirement for a weighbridge/scale may also only be for a limited period.

Information

CWCSA may require financial statements and other pertinent information to allow a credit worthy check to be undertaken.

Surety

The directors/owners may have to sign personal surety.

Tax Efficiency

From a taxation perspective, monthly rentals can be claimed as deductible expenses. This is more tax efficient than the depreciation of a purchase option.

Servicing

The monthly rental includes a service agreement and quarterly inspections during the rental period.

CASH PURCHASE (Commentary)

Cash Flush

This option is for Businesses that are cash flush or do not wish to gear their balance sheet or incur an interest expense.

Information

The requirement for supplying CWCSA with financial statements or going through the other usual credit worthy checks is negated.

Surety

The directors/owners will not have to sign personal surety.

Taxation

The tax consequences are that the asset can be capitalised at cost and claim for wear and tear calculated at 10% per annum.

Servicing

As part of CWCSA’s warranty the customer benefits from a twelve months service free (terms and conditions apply) after which the option to enter into a service contract or pay for ad hoc repairs.

Terms

CWCSA is flexible with its payment terms. Typically these are 50% on signing the agreement, 30% on delivery of the system to site and the balance on commissioning and hand over.

INSTALLMENT SALE (Commentary)

Ownership

Businesses requiring cash resources for working capital but that would still like to own the weighbridge/scale can enter into an installment sale agreement.

Down Payment

An initial payment is payable on signing and the installments commence on the date of hand over. The period is flexible from 12 to 60 months.

Information

CWCSA may require financial statements and other pertinent information to allow a credit worthy check to be undertaken.

Surety

The directors/owners may have to sign personal surety.

Taxation

The tax consequences are that the asset can be capitalised at cost and claim for wear and tear calculated at 10% per annum. In addition the interest portion of the installments paid can be claimed as a deduction.

Servicing

As part of CWCSA’s warranty the customer benefits from a twelve months service free (terms and conditions apply) after which the option to enter into a service contract or pay for ad hoc repairs.

RENTAL THEN BUY Commentary

Ownership

Businesses may have a requirement to initially rent for a period and then at a later date, between 12 months and 60 months, when circumstances change, to convert the rental into a cash purchase with the option of a service contract.