Capitas Finance | Technology

Technology

Can you justify the cost of owning technology?

Technology has forced businesses to become more cost effective and to look at ways to increase productivity. It’s hard enough deciding which products and services to choose, let alone making decisions as to how to acquire, finance and manage them. Technology - just like business, is in a constant state of change. The decisions you make don’t just affect the IT department. They are the platform for operational efficiency and potentially higher margins. Do you really want to take ownership of rapidly depreciating assets? Can you justify the cost of owning technology - or the risk?

Flexibility is the key

Capitas Finance offers a wide variety of IT financial solutions from simple Hardware Finance agreements to highly specialised arrangements for business application environments such as turnkey Project Finance. We also provide Software Finance and fund implementation services; even bespoke software development initiatives from time to time. Technology finance from Capitas is a strategy for gaining a variety of benefits.

• Turns large upfront costs into affordable monthly payments
• Improves budget management with predictable costs
• Accelerates project approval and implementation
• Additional funding to existing working capital and credit lines
• Advances are not repayable upon demand
• Funding for hard and soft costs
• Flexible upgrade options available throughout the finance term to meet changing requirements
• Specify products and services from the vendor(s) of your choice
• Encompass standalone products or all aspects of a solution within a single periodic payment

Project Finance Plan

Project finance provides an on-demand financing facility that matches the scope and duration of your IT project ... and your finance agreement start date is deferred until the solution is “live”!

This facility is specifically designed to help you manage particularly large or protracted technology acquisitions from single or multiple vendors. Your finance agreement start date is deferred until the project is successfully completed.

At the outset of the project, you and your vendor(s) agree with Capitas the likely duration of the project and the approximate total contract value. These facts are then used as the basis to arrange both the pre-lease (interim finance facility) for the project period and the finance contract to accommodate the commissioned solution. The pre-lease then allows you to commence the project, secure in the knowledge that the equipment vendor(s) can be pre-paid throughout the delivery and installation phase.

Interest payments due on equipment delivered before the end of the project can be paid one of three ways - monthly in arrears, amortised over the duration of the project period and invoiced on go-live or conveniently rolled into a periodic payment as part of the finance agreement.

Benefits of Pre-Lease Project Finance Plan:

• You can concentrate on managing the project, as opposed to managing numerous finance agreements with varying payments and end-dates.
• You get the products and services on a ‘have now, pay later’ basis and need not utilise valuable capital to make deposit payments.
• One single finance agreement commences at the end of the project once the solution has gone live
• Short-term interim finance facility period of typically between 3 to 12 months followed by a medium-term funding agreement over 3 to 5 years

Today, both SME businesses and large enterprises are opting for financing over purchasing. Preservation of capital, increased cashflow and the desire to maintain competitive advantage are the drivers. In the process, they’re enhancing the benefits of technology whilst simultaneously managing risk.

Sale and Leaseback

Keep flexible and adapt your technology requirements to meet your future needs

Your IT assets may meet current needs, but will they adapt to meet future needs? If disposal is not an option, you could consider a sale & leaseback facility. Capitas can purchase your existing hardware, dependent on the book value and specific requirements, and lease the equipment back to you for the remainder of an agreed term. This popular choice releases capital tied up in the assets, straight into your company’s reserves.

Features and benefits of Sale & Leaseback:

• Enjoy an immediate injection of cash from the sale of the assets
• Can include certain capital and tax advantages and improve key ratios such as gearing
• Simple paper transaction that is easy to administer
• Depending on facility structure this could result in the removal of the assets from the balance sheet
• Return your equipment at the end of the lease term and eliminate all costs and headaches associated with equipment disposal
• New for old on certain types of equipment - you can benefit from our disposal routes to release the cash value of these products and replace them with new under-managed service or contract- hire type arrangements
• Structure your lease to include product refresh options, ensuring you have the IT equipment you need for your growing business

Leasing is a powerful tool that, if well applied, can significantly reduce costs and act as a catalyst to drive overall systems management strategies.*

*Source: Dataquest

Hire Purchase

Spread the cost of your IT over its useful working life and pay for it using the revenue it earns!

Hire Purchase is a straightforward repayment facility that enables you to ultimately own the equipment. The cost of the solution can be spread over its useful working life and paid for out of the revenue it earns. Payment patterns can be tailored to suit individual needs, generally involving a deposit followed by a series of periodic instalments. 

Features and benefits of Hire Purchase:

• With ownership you have total control over the IT equipment
• Ownership normally carries the potential for claiming capital allowances, including any enhanced first-year allowances
• VAT on the cost of the IT equipment is 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

Operating Lease

Helping cashflow and making ‘off-balance sheet’ funding possible

Leasing IT equipment 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. Typically, the lease term is designed to match your company’s IT strategy with a projection of new technology or upgrade needs. You pay rent rather than expense depreciation and can upgrade to new products as they become available. In fact, industry studies show that circa 80 percent of IT equipment leases never come to term, since leasing makes it so convenient to trade up to the newest technology.

Under the terms of an operating lease, Capitas Finance 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 IT equipment, an operating lease does offer you the practical benefits of ownership without some of the potential burdens.

Features and benefits of Operating Leasing:

• Off-balance sheet reporting improves liquidity and solvency ratios such as current ratio, debt-to-equity, and interest cover
• Lower pre-tax rentals as the funder takes a residual risk on the equipment value
• Rentals are structured according to your cash flow
• Rentals can be treated as an operating expense and are fully allowable against taxable profit
• As the asset is treated as ‘off’ balance sheet we will claim the capital allowances and reflect this in your rentals
• Off-balance sheet funding means no requirement to depreciate 

Leasing provides a means of transferring the residual and disposal risk to the lessor under contracted terms.*

*Source: Gartner Group 

Finance Lease

All the benefits of ownership without the burden

Financially and operationally, many companies have found that simply leasing or renting hardware enables them to preserve cash and credit lines, reduce costs, simplify budgeting, and speed implementation.

A Finance Lease agreement gives you the full use of the hardware solution for an agreed period of time for an agreed periodic rental. It is a popular flexible method of funding equipment as it offers all the practical benefits of ownership without any of the potential burdens. Leasing enables you to adapt more quickly to changing competitive environments, and current e-business strategies underscore the importance of access to flexible and competitive financing options.

Features and benefits of Finance Leasing:

• Flexible repayment structures give you immediate and full use of the hardware 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
• Eliminates risks and costs associated with disposing of equipment at the end of its working life

With leasing, customers are better able to manage technology cycles and their computer equipment budgets.*

*Source: Computer Reseller News

Payment Plan

Capitas Finance treads where other funders fear to go

It is a fact that the number of financing providers in this area is limited - and so are their capabilities and offerings. Similar to an unsecured loan, this facility structure is generally used to finance bespoke software development and services initiatives.

Capitas Finance 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 bespoke software and services financing, 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 vendor. Whatever you purchase belongs to you. The advance is not secured on your debtor book or tied to a fixed asset.

Features and benefits of Payment Plan:

• Turn large upfront costs into affordable monthly payments
• 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

Rental Plan

Acquire your software at minimum operating costs

Renting software licenses provides options that outright purchase cannot. You pay rent rather than expense depreciation and can upgrade to new products and the latest software updates as they become available. Rental structures aid cash flow and make ‘off-balance sheet’ funding possible.

Features and benefits of Rental:

• Off-balance sheet reporting improves liquidity and solvency ratios such as current ratio, debt-to-equity, and interest cover
• Rentals are structured according to your cash flow
• Rentals can be treated as an operating expense and fully allowable against taxable profit
• As the software consideration is treated as ‘off’ balance sheet we will claim the capital allowances and reflect this in your rentals
• Off-balance sheet funding means no requirement to depreciate

Finance Lease

All the benefits of ownership without the burden

Financially and operationally, many companies have found that simply leasing or renting software licenses enables them to preserve cash and credit lines, reduce costs, simplify budgeting, and speed implementation.

A Finance Lease agreement gives you the full use of the software for an agreed period of time for an agreed periodic rental. It is a popular flexible method of funding both operating and application software as it offers all the practical benefits of ownership without any of the potential burdens. Leasing enables you to adapt more quickly to changing competitive environments, and current e-business strategies underscore the importance of access to flexible and competitive financing options.

Features and benefits of Finance Leasing:

Flexible repayment structures give you immediate and full use of the software for a minimal outlay

• Services can be included within the financing arrangement
• 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 need

With leasing, customers are better able to manage technology cycles and their computer equipment budgets.*

*Source: Computer Reseller News

Benefits of Capitas

There are many compelling reasons to finance your IT. Our financial solutions let you acquire the technology you need now relating benefits to costs over your equipment’s useful life. You can free up valuable cash resource and start realising the payback right away.

Why should you choose Capitas Finance as your technology financing partner?

Simply, it’s because we offer you:

• Sound financial advice: We can help you conserve cash, lower your total cost of ownership, and support your overall financial objectives
• Tailored solutions: Our facility structures can be customised to your unique business situation and meet the needs of all stakeholders
• A pleasing experience: We’ve simplified the entire financing process, from acquisition to project management, through to disposal if required
• Relationship management: We’re a proven partner, dedicated to your success across not just the life cycle of your technology investments but the lifetime of our relationship
• Fit for purpose financing: Our financing solutions can help you optimise value from your investment in technology