Capitas Finance | Clean Technology

Operating Lease

Making 'off-balance sheet' funding possible

Leasing clean technology provides options that ownership cannot. The risk of equipment obsolescence under the terms of an operating lease lies not with you, but rather with us. You pay rent rather than expense depreciation. Capitas builds in a residual value to reduce the rentals, therefore helping cash-flow and making 'off-balance sheet' funding possible. Although you will never own the asset, an operating lease does offer you the practical benefits of ownership without some of the potential burdens.

Key benefits of Operating Lease:

• Rentals are based on the planned economic usage of the asset - not the life of the asset
• Capitas takes the residual risk on the equipment's value
• Rentals are structured according to your cash-flow
• Rentals can normally be offset against taxable profit
• The asset is treated as 'off' balance sheet - we will claim the writing down allowances and reflect this in the rentals that you pay
•  Off-balance sheet funding means no requirement to depreciate

Receivables Finance

Capitas works alongside stakeholder management to deliver receivables finance solutions for suppliers and customers - whatever the circumstances

Receivables Finance enables you to raise cash against future revenues on supply contracts. This is particularly suitable for suppliers to the corporate and public sectors, especially where there may be large initial investment costs during the early period of a contract.

Receivables financing is available on contracts periods of up to 15 years. We are able to provide flexible payment terms, coinciding with any qualifying contract. We will provide you with partial or full payment for the total Net Present Value of the contract upon signing.

Supplier Benefits:

• Improved cash-flow during the early stages of new contracts
• Instalments assist clients cash flow and overcome budget constraints supporting the supply process
• Fully compliant with all PFI/PPP guidelines and legislation
• Receivables finance facilities are available from £75,000 upwards.

Client Benefits:

• Payments can be spread to coincide with contracts of up to fifteen years
• You can conserve cash to drive other areas of your operation
• Payment terms can be tailored to suit cash flow, future budgets, government supported incentives e.g. feed in tariffs (FITs) and energy savings generated.

Commercial Loan

Unsecured finance facility to cover your soft costs

It is a fact that the number of asset finance providers with real expertise in this area is limited - and so are their capabilities and offerings. This facility structure is generally used to finance soft costs, for example, buildings works, professional fees and delivery, installation, commissioning etc.

Capitas stands apart, offering credit-qualified clients a long-term financing strategy with flexible funding options and competitive rates that can help manage risk, improve cash flow and reduce costs. With a commercial loan, you can hold onto your cash longer and use it for other investments - or simply use the facility to provide a financial cushion.

Payment can be made either directly to you in full, or alternatively, to the supplier(s) of your choice. Whatever you purchase belongs to you. The advance is typically unsecured and not tied to your debtor book or a fixed asset. 

Benefits of Commercial Loan:

• Turn large upfront soft costs into affordable instalments
• Match cost outlays to projected benefits
• Improve budget management with predictable costs
• Increase return on investment (ROI); lower total cost of ownership (TCO)
• Accelerate project approval and implementation
• Preserve cash and credit lines for more strategic investments
• Fixed rate agreement allowing you to budget with certainty

Hire Purchase

What could be easier?

Hire Purchase is a straightforward repayment facility that enables you to ultimately own the assets. The cost of the equipment can be paid for out of the revenue it earns e.g. from feed in tariffs (FITs) and from energy savings. Payment patterns can be tailored to suit cashflow and budgets, generally involving a deposit followed by a series of periodic instalments. 

Benefits of Hire Purchase:

• With ownership you have total control over the equipment
• Ownership normally carries the potential for claiming writing down allowances and/or capital grants
• VAT on the cost of the assets is normally reclaimable
• Fixed or variable interest rate - you make your own assessment and choose accordingly
• The interest element of repayments can normally be offset against taxable profit
• The asset appears on your balance sheet

Finance Lease

All the benefits of ownership without the burden

A Finance Lease agreement gives you the full use of the equipment for an agreed period of time for an agreed periodic rental. This is a popular flexible method of funding a broad array of clean technologies. It offers all the practical benefits of ownership without any of the potential burdens.

Benefits of Finance Leasing:

• Flexible repayment structures give you immediate and full use of the assets for a minimal outlay
• Rentals can be structured to reflect cash-flow requirements
• Fixed interest rate provides certainty of repayments and assists budgeting
• Rentals can be offset against taxable profit
• VAT is paid on the rentals not the purchase price
• The lessor claims writing down allowances, and these are reflected in the rentals you pay
• Retains existing credit lines and gives you a new source of credit for current and future needs

Project Finance

Project finance provides a facility that matches the scope and duration of your project timetable ... the finance agreement start date is deferred until the clean technology is successfully delivered, installed and commissioned!

This facility is specifically designed to help customers manage large single projects or multi-site clean technology installations.

At the outset of the project, you and your supplier (for example a landlord, outsourcing company, PFI, developer, building contractor or equipment manufacturer) agree with Capitas the likely duration of the project and the approximate contract value. These facts are then used as the basis to arrange both an Interim Finance Facility (IFF) for the project period and the finance contract to accommodate the completed equipment installation. The IFF then allows you to commence the project, secure in the knowledge that the equipment supplier(s) can be pre-paid throughout the delivery, installation and commissioning. Interest accrued on the equipment delivered before the end of the project can be conveniently rolled into the periodic instalment as part of the finance agreement.

You can concentrate on managing the project, as opposed to managing numerous finance agreements with varying payments and end dates. You also get the equipment on a 'have now, pay later' basis and need not utilise valuable capital to make deposit payments.

• Particularly useful for large single or multi-site installations with purchases made over a protracted period
• Interest payments due on equipment and services deliveries over the duration of the project period are rolled into the finance arrangement
• One single finance agreement commences at the end of the project once the equipment has been successfully delivered, installed and commissioned
• IFF period typically between three months and eighteen months followed by a finance facility over a five to fifteen year term depending on cash flow, future budgets, government supported incentives e.g. feed in tariffs (FITs) and energy savings generated.

Enhanced Capital Allowances

Give yourself a break – investing in energy-saving equipment does more than just save your business money. It’s often more tax efficient.

Enhanced Capital Allowances (ECAs) are a straightforward way for a business to improve its cash flow through accelerated tax relief. The ECA scheme for energy-saving technologies encourages businesses to invest in energy-saving plant or machinery specified on the Energy Technology List (ETL) which is managed by the Carbon Trust on behalf of Government.

The ECA scheme provides businesses with 100% first year tax relief on their qualifying capital expenditure. The ETL specifies the energy-saving technologies http://www.eca.gov.uk/etl/find/ that are included in the ECA scheme. The scheme allows businesses to write off the whole cost of the equipment against taxable profits in the year of purchase. This can provide a cash flow boost and an incentive to invest in energy-saving equipment which normally carries a price premium when compared to less efficient alternatives.

How it works

So if your business pays corporation tax at 28%, every £1,000 spent on qualifying equipment would reduce its tax bill in the year of purchase by £280. In contrast, for every £1,000 spent, the generally available capital allowance for spending on plant and machinery* would reduce your business' tax bill in the year of purchase by £56. In other words, an ECA can provide a cash flow boost of £224 for every £1,000 it spends in the year of purchase**. 

Improve your bottom line

For more information about the scheme, read the attached ECA scheme for energy-saving technologies PDF brochure or visit the ECA website http://www.eca.gov.uk/etl/default.htm to check the eligibility of equipment via the Energy Technology List (ETL).

Footnotes

* 20% a year on the reducing balance basis.

** ECAs provide 100% tax relief, so there is no further tax relief in later years. The general rate of capital allowances does not provide 100% tax relief so there is a balance of spending to carry forward on the reducing balance basis for relief in later years.
 

Why you should choose Capitas as your financing partner?

Simply, it's because we offer you:

• Finance and environmental expertise – our team comprises senior ‘hands on’ finance professionals and low carbon consultants who understand the dynamics of these essential clean technologies and can advise on sustainable business strategies
• Smart solutions – we address the complexities of staged equipment delivery, commissioning and installation paying invoices on your behalf in line with contracted terms; instalments do not commence until the equipment has been successfully commissioned
• Tax based finance – we address preferences for on or off balance sheet funding and advise on how this will affect your tax position
• Complete supplier independence - you are not tied to any one supplier allowing you to acquire your equipment and services at the best price, from the outsourcing company, PFI, landlord, developer, contractor, manufacturer or supplier that best meet your needs
• A lifetime relationship – we put great value on building strong relationships and communicating with clients; our aim is to be your one-stop funding partner for clean technologies that deliver economic return and accelerate carbon reduction targets.

Benefits of Capitas

Capitas takes a practical approach, always looking for where we can make the maximum impact and deliver the most value to our customers. Our work focuses on providing specialist advice and finance to help organisations cut carbon. We are passionate about the environment and wish to contribute to key UK goals of lower carbon emissions by encouraging investments in emerging technologies. 

Clean Technology

Finance for green business growth 

Capitas provides specialist funding support to help business and the public sector boost returns by investing in low carbon technologies that cut carbon emissions and save energy.

Our financial products and services are designed to help organisations implement sustainable business strategies, delivering competitive advantage and economic return.

Unlike some lenders, we'll fund up to 100% of the total costs of a project. Equipment, professional fees, building works and maintenance can be included within the arrangement with instalments aligned to cash flow, future budgets, government supported incentives e.g. feed in tariffs (FITs) and energy savings. Expenditure is fixed over the period with terms of up to fifteen years.

We finance the following equipment although this list is not exhaustive:

• Solar including solar water heating and solar photovoltaic electricity generation – funding for new commercial build or commercial retrofit applications available (Solar PV Finance)
• Combined Heat and Power (CHP) – commercial applications where alongside the electricity generated the heat by-product can be utilised for space heating (Financing CHP Projects)
• LED Lighting retrofits - funding for new commercial build or commercial retrofit LED (light-emitting diode) lighting projects (Financing LED Lighting Retrofits) 
• Wind from light commercial wind turbine funding, to larger scale wind projects - this includes arranging project finance for wind farms
• Geothermal equipment such as ground source heat pumps and air source heating
• Zero Emission Vehicles – hybrid, electric and bi-fuel vehicles including light commercial vans, commercial vehicles and passenger cars
• Hydro Power Finance – funding for small scale and larger hydro power projects
• Bio-Fuel Manufacturing Plant Finance - Bio-diesel, Bio-ethanol and Bio-gas production
• Bio-mass Heating Systems - commercial bio-mass boiler and heating system applications.