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Monday, 22 June 2009
Tuesday, 16 June 2009
Refinancing In Todays Economy
Refinance is the most enquired product in todays market. Businesses are currently having their overdraft squeezed by high street banks they are looking for alternative forms of finance.
How do I refinance?
Most companies will have assets in the business of some value, the process is relatively straight forward. The finance company will obtain a desktop valuation on the asset. This value will be a forced sale value and ultimately the finance company will lend between 60%-80% of this value depending on the asset.
Proof of title will be necessary and will normally come in the way of the original invoice. Once valued and satisfaction of title has been evidenced a capital injection will made into the business, payments will normally start the following month.
Yellow Note Asset Finance are specialists in refinancing business assets. If you would like a capital injection please contact us on 07040 900 768.
How do I refinance?
Most companies will have assets in the business of some value, the process is relatively straight forward. The finance company will obtain a desktop valuation on the asset. This value will be a forced sale value and ultimately the finance company will lend between 60%-80% of this value depending on the asset.
Proof of title will be necessary and will normally come in the way of the original invoice. Once valued and satisfaction of title has been evidenced a capital injection will made into the business, payments will normally start the following month.
Yellow Note Asset Finance are specialists in refinancing business assets. If you would like a capital injection please contact us on 07040 900 768.
Wednesday, 10 June 2009
Relationship with NPV and Lessors
Asset Finance lessors do not generally approach the analysis from the ‘present value’ direction. Generally, lessors will want to make a specified margin on their funds. For example, a lessor may decide that it wants to make an interest turn of 2% on the capital invested in its finance leases. So it feeds 2% into the computer program, together with other knowns - the cost of the asset (the 'loan'), the cost of money, its likely expenses, the tax rates, the capital allowances rates, the rental payment dates etc - and out comes the rentals the lessor needs to charge to make a 2% turn. Although the starting point is different, the mathematics in the program rely on the time-value-of-money concepts previously outlined.
In practice lessors may depart from their theoretical target return or their target return may vary from sector to sector. They may charge more if the risk of default is greater or if the market will bear it. They may charge less if competition is fierce and they are trying to gain market share of if the lessee has a very high credit rating. Small ticket lessees are generally charged more than big ticket lessees (with small ticket lessees being charged a margin of several percent and big ticket lessees sometimes being charged a margin of 20 basis points (0.2%), or even less.
Lessors can also design rental profiles to suit the lessee. For example, often lessees want to match the profits from a new asset with the rental payments. So they want low or nil rentals when a major asset is being built (possibly over several years) and while production builds up. As the lessee's profits begin to increase as the asset comes on stream the lessee can increasingly afford larger rentals. So they want a rental profile that rises over time (a 'stepped' rental profile).
In practice lessors may depart from their theoretical target return or their target return may vary from sector to sector. They may charge more if the risk of default is greater or if the market will bear it. They may charge less if competition is fierce and they are trying to gain market share of if the lessee has a very high credit rating. Small ticket lessees are generally charged more than big ticket lessees (with small ticket lessees being charged a margin of several percent and big ticket lessees sometimes being charged a margin of 20 basis points (0.2%), or even less.
Lessors can also design rental profiles to suit the lessee. For example, often lessees want to match the profits from a new asset with the rental payments. So they want low or nil rentals when a major asset is being built (possibly over several years) and while production builds up. As the lessee's profits begin to increase as the asset comes on stream the lessee can increasingly afford larger rentals. So they want a rental profile that rises over time (a 'stepped' rental profile).
Net Present value
Why is NPV important in asset finance?
Assume market interest rates are 10% a year payable annually in arrear. This means a sum of £1000 today will be worth £1,100 in a year's time. So, ignoring questions of credit risk and profit margin etc, you should be able to sell your entitlement to a sum of £1,100 in a year's time for £1000 today. Put another way, the 'present value' of that future entitlement to £1,100 is £1000. Similarly, the present value of an entitlement to £1,210 in two years is also £1000 (because £1000 compounded at 10% is £1,210).
The intervals at which compounding of interest occurs can have a significant effect. Interest at 10% calculated at monthly rests is worth more than interest at 10% calculated at annual rests. Interest is earned on interest earlier in the monthly case.
These simple examples of the 'time-value-of-money' illustrate the principles which lie at the heart of leasing calculations. The lessor's upfront tax losses save tax (or generate repayments) in the early part of the lease. In due course the lessor will have to pay tax on his profit. The tax on later rentals receivable should be more than the tax saved upfront (because earnings exceed expenses overall). But the upfront tax saved can be worth more (have a greater present value) than the larger amount of tax the lessor eventually has to pay on the profits in the future.
Consider this very simplified example. Suppose that
• a finance lessor's investment in plant today will save them tax of £1,000,000 in a year's time
• the lessor will have to pay tax of £1,200,000 in five years' time on the profit from leasing the asset.
With a 10% interest rate
• the net present value of the £1,000,000 saved next year is £909,091 (£909,091 invested today at 10% yields interest of £90,909 in a year's time; so £909,091 invested now + £90,909 interest amounts to £1,000,000 in a year; or working back from the future sum of £1,000,000 x 100/110 = £909,091)
• the net present value of the £1,200,000 is £745,106 (compounding £745,106 at 10% for five years = £1,200,000; or working back from the future sum of £1,200,000: £1.2m x (100/110 x 100/110 x 100/110 x 100/110 x 100/110) = £745,106).
In short, the net present value (the 'real' value today) of the £1,000,000 saved early on by the finance lessor (£909,091) is greater than the net present value (the 'real' value today) of the £1,200,000 due in five years (£745,106). So the deal looks profitable for the lessor.
Assume market interest rates are 10% a year payable annually in arrear. This means a sum of £1000 today will be worth £1,100 in a year's time. So, ignoring questions of credit risk and profit margin etc, you should be able to sell your entitlement to a sum of £1,100 in a year's time for £1000 today. Put another way, the 'present value' of that future entitlement to £1,100 is £1000. Similarly, the present value of an entitlement to £1,210 in two years is also £1000 (because £1000 compounded at 10% is £1,210).
The intervals at which compounding of interest occurs can have a significant effect. Interest at 10% calculated at monthly rests is worth more than interest at 10% calculated at annual rests. Interest is earned on interest earlier in the monthly case.
These simple examples of the 'time-value-of-money' illustrate the principles which lie at the heart of leasing calculations. The lessor's upfront tax losses save tax (or generate repayments) in the early part of the lease. In due course the lessor will have to pay tax on his profit. The tax on later rentals receivable should be more than the tax saved upfront (because earnings exceed expenses overall). But the upfront tax saved can be worth more (have a greater present value) than the larger amount of tax the lessor eventually has to pay on the profits in the future.
Consider this very simplified example. Suppose that
• a finance lessor's investment in plant today will save them tax of £1,000,000 in a year's time
• the lessor will have to pay tax of £1,200,000 in five years' time on the profit from leasing the asset.
With a 10% interest rate
• the net present value of the £1,000,000 saved next year is £909,091 (£909,091 invested today at 10% yields interest of £90,909 in a year's time; so £909,091 invested now + £90,909 interest amounts to £1,000,000 in a year; or working back from the future sum of £1,000,000 x 100/110 = £909,091)
• the net present value of the £1,200,000 is £745,106 (compounding £745,106 at 10% for five years = £1,200,000; or working back from the future sum of £1,200,000: £1.2m x (100/110 x 100/110 x 100/110 x 100/110 x 100/110) = £745,106).
In short, the net present value (the 'real' value today) of the £1,000,000 saved early on by the finance lessor (£909,091) is greater than the net present value (the 'real' value today) of the £1,200,000 due in five years (£745,106). So the deal looks profitable for the lessor.
Plant or Machinery Leasing
Plant or machinery leased with other assets:
Plant or machinery may be leased with other assets. For example a production line may be leased with the buildings which house it. Or a car may be leased with a photocopier.
For the long funding lease rules to work as intended, and treat longer periods of financing of plant or machinery as just that, it is necessary to separate such leases into two or more leases and apply the long funding lease rules to each deemed lease.
In broad terms, where plant or machinery is leased with other assets, the plant or machinery is treated as if it were the subject of a separate notional lease. Where different types of plant or machinery are leased under the same lease they too are treated as if they are subject to separate notional leases. The tests for a long funding lease, and the rules for taxing them, are then applied to each notional lease of plant or machinery.
Background plant or machinery is the sort of plant or machinery that might be found in many types of building and performs a ‘background’ function. It includes plant or machinery such as lifts and central heating
Asset Finance
Plant or machinery may be leased with other assets. For example a production line may be leased with the buildings which house it. Or a car may be leased with a photocopier.
For the long funding lease rules to work as intended, and treat longer periods of financing of plant or machinery as just that, it is necessary to separate such leases into two or more leases and apply the long funding lease rules to each deemed lease.
In broad terms, where plant or machinery is leased with other assets, the plant or machinery is treated as if it were the subject of a separate notional lease. Where different types of plant or machinery are leased under the same lease they too are treated as if they are subject to separate notional leases. The tests for a long funding lease, and the rules for taxing them, are then applied to each notional lease of plant or machinery.
Background plant or machinery is the sort of plant or machinery that might be found in many types of building and performs a ‘background’ function. It includes plant or machinery such as lifts and central heating
Asset Finance
Asset Finance
Asset Finance
Contact Yellow Note Asset Finance on 07040 900 768 for assitance is sourcing finance for your assets.
Contact Yellow Note Asset Finance on 07040 900 768 for assitance is sourcing finance for your assets.
Tuesday, 2 June 2009
Lease - Tax Benefits
A lease of relatively long-lived plant or machinery typically generates tax losses in the first years, because the capital allowances outstrip the income from the lease, and goes on to produce tax profits in the later years, because the capital allowances were then exhausted.
The availability of capital allowances to lessors has been restricted by the long funding lease rules introduced by FA 2006 but capital allowances are still available on leased plant or machinery, either because the leases pre-date the long funding lease rules or because they are outside those rules.
Note also that the issues described here are as likely to arise on, for example, the 7-year lease of a ship as they are on a 25-year lease of that ship.
Groups took advantage of the early tax losses by surrendering them as group relief. A group looking to maximise the tax advantages would then sell the lessor company to a loss making group as the lease moved into the tax profitable phase.
The new group surrendered its losses to the lessor company so that no tax was payable on the deferred profits. Where the new owner was a long-term loss-maker the effect was to turn the capital allowances timing advantage into a permanent deferral of tax.
Often, the lease would be terminated in the hands on the loss-maker and the leased asset sold. The tax profit on selling the asset was covered by losses surrendered by the new owner group.
The sale of lessors legislation deters this transaction by treating as income an amount which reflects the timing advantage gained from the capital allowances while the lessor company is in the ownership of the selling group. On its own this would deter all sales of lessor companies but the legislation goes on to treat the lessor company as incurring an expense equal to the income amount while the lessor company is in the ownership of the buying group.
When the buying group has profits the expense is valuable as it may generate losses which are available to surrender as group relief. The profit making buyer is not deterred from buying and is likely to pay more for the shares in the lessor company, compensating the seller for the tax charge suffered. When the buying group has losses the expense brings no benefits and the buying group will pay no more for the shares, leaving the seller exposed to a charge. This sale becomes unattractive and is deterred.
The legislation operates in a similar way where the arrangements are intended to allow a profitable partner to access the tax losses and a loss-making partner to shelter the taxable profits.
For more inofmration regarding asset finance please visit our asset finance website
The availability of capital allowances to lessors has been restricted by the long funding lease rules introduced by FA 2006 but capital allowances are still available on leased plant or machinery, either because the leases pre-date the long funding lease rules or because they are outside those rules.
Note also that the issues described here are as likely to arise on, for example, the 7-year lease of a ship as they are on a 25-year lease of that ship.
Groups took advantage of the early tax losses by surrendering them as group relief. A group looking to maximise the tax advantages would then sell the lessor company to a loss making group as the lease moved into the tax profitable phase.
The new group surrendered its losses to the lessor company so that no tax was payable on the deferred profits. Where the new owner was a long-term loss-maker the effect was to turn the capital allowances timing advantage into a permanent deferral of tax.
Often, the lease would be terminated in the hands on the loss-maker and the leased asset sold. The tax profit on selling the asset was covered by losses surrendered by the new owner group.
The sale of lessors legislation deters this transaction by treating as income an amount which reflects the timing advantage gained from the capital allowances while the lessor company is in the ownership of the selling group. On its own this would deter all sales of lessor companies but the legislation goes on to treat the lessor company as incurring an expense equal to the income amount while the lessor company is in the ownership of the buying group.
When the buying group has profits the expense is valuable as it may generate losses which are available to surrender as group relief. The profit making buyer is not deterred from buying and is likely to pay more for the shares in the lessor company, compensating the seller for the tax charge suffered. When the buying group has losses the expense brings no benefits and the buying group will pay no more for the shares, leaving the seller exposed to a charge. This sale becomes unattractive and is deterred.
The legislation operates in a similar way where the arrangements are intended to allow a profitable partner to access the tax losses and a loss-making partner to shelter the taxable profits.
For more inofmration regarding asset finance please visit our asset finance website
Friday, 29 May 2009
Finance Lease Rental Profiles
Finance leases: Asset Finance rental profiles
Finance lease rental schedules can be structured in all kinds of ways; for example, the initial rentals could be nil or much lower than the amount needed to pay off the debt. Subsequent rentals are then correspondingly higher.
Where the initial rentals are nil (or set at an amount less than the ‘interest’ which is accruing on the ‘loan’) the lessee’s debt to the lessor increases. This led to tax planning opportunities where 'interest' earnings could be recognised for accounts purposes much sooner than they were taxable.
Where the rentals are set at an amount equal to the ‘interest’ on the ‘loan’ the lessee’s debt remains static and the lease is equivalent to an interest-only loan. Such a lease will, of course, contain a requirement to pay a terminal rental at the end of the lease term which will, in effect, repay the ‘loan’.
Various combinations are possible. For example, the lease might be equivalent to an interest-only loan for a few years and then become equivalent to a repayment loan for the rest of the lease term.
Finance lease rental schedules can be structured in all kinds of ways; for example, the initial rentals could be nil or much lower than the amount needed to pay off the debt. Subsequent rentals are then correspondingly higher.
Where the initial rentals are nil (or set at an amount less than the ‘interest’ which is accruing on the ‘loan’) the lessee’s debt to the lessor increases. This led to tax planning opportunities where 'interest' earnings could be recognised for accounts purposes much sooner than they were taxable.
Where the rentals are set at an amount equal to the ‘interest’ on the ‘loan’ the lessee’s debt remains static and the lease is equivalent to an interest-only loan. Such a lease will, of course, contain a requirement to pay a terminal rental at the end of the lease term which will, in effect, repay the ‘loan’.
Various combinations are possible. For example, the lease might be equivalent to an interest-only loan for a few years and then become equivalent to a repayment loan for the rest of the lease term.
Wednesday, 27 May 2009
Off balance sheet funding
Asset finance operating leases: off balance sheet finance
Operating leases, particularly on expensive assets, are often simply another form of finance. In these cases the lessor takes some equity risk, but in substance it is still making a loan to the lessee.
Leases that function as financing transactions may be properly classified as operating leases, but the lessor is likely to sell the asset at the end of the lease and so, as with finance leases, there may only be a single lessee. The difference is that, because the rentals do not fully cover the cost of the asset (plus interest), the lessor has to take some risk that the value of the asset at the end of the lease (the 'residual value') will not pay off that part of the 'loan' that is not, in effect, repaid via the rental stream.
The advantages for the lessee include not having to pay for the full cost of the asset over the term of the lease and the fact that borrowing remains off balance sheet – hence operating leases may be a form of off balance sheet finance. The latter is important for some businesses for commercial reasons. The lessee may, however, have to pay what amounts to a higher rate of interest on what amounts to the loan, as well as losing any upside on the expected residual value at the end of the lease term.
Operating leases, particularly on expensive assets, are often simply another form of finance. In these cases the lessor takes some equity risk, but in substance it is still making a loan to the lessee.
Leases that function as financing transactions may be properly classified as operating leases, but the lessor is likely to sell the asset at the end of the lease and so, as with finance leases, there may only be a single lessee. The difference is that, because the rentals do not fully cover the cost of the asset (plus interest), the lessor has to take some risk that the value of the asset at the end of the lease (the 'residual value') will not pay off that part of the 'loan' that is not, in effect, repaid via the rental stream.
The advantages for the lessee include not having to pay for the full cost of the asset over the term of the lease and the fact that borrowing remains off balance sheet – hence operating leases may be a form of off balance sheet finance. The latter is important for some businesses for commercial reasons. The lessee may, however, have to pay what amounts to a higher rate of interest on what amounts to the loan, as well as losing any upside on the expected residual value at the end of the lease term.
Operating Lease Risks
In many cases the asset finance operating lessor will make an asset available for a relatively short period of the asset’s useful life and it will hope to do better than make a finance lessor's banker's interest return.
The operating lessor takes an equity risk and hopes the market for its asset will reward it accordingly at the end of the lease period. But nothing is certain. The operating lessor's risk is that no-one will want to hire its asset, or they won't be prepared to pay the price it expects, or the asset is defective or wears out faster than expected. But the operating lessor could make a lot more money than a banker if it is successful and there is a big demand for its asset at good prices, the asset is durable and so on.
With some assets this may not involve much risk; for example, a fleet of cars tends to have, in the aggregate, a relatively predictable minimum residual value in two years' time. Alternatively, risk can be reduced by insurance arrangements but the lessor needs to take care that such arrangements do not convert the lease into a finance lease.
Broadly, an operating lessor needs to manage its leased assets actively and needs expertise in the potential market for their use, choosing them, and maintaining them. For example, a plant hire firm needs to understand the market for the short-term hire of trucks, bulldozers, compressors etc. They need to have the right selection of plant to meet the demand without being left with a surplus. They need to pick plant which is reliable, easy to service and will have a good resale value. They have to understand the hardware as well as the market.
This is in contrast to typical finance lessors who generally don't need to know anything more about the plant or machinery or the market for it. They generally simply make a lender's financial judgment about the ability of the lessee to pay the rentals. Any value in the asset is returned to the lessee if the asset is sold.
In some cases, particularly where the lease has a substantial final rental, a finance lessor may need to have some knowledge of the asset’s market value. This is because the lease will be structured so that the asset is sold at the end of the lease term, with the sales proceeds being used to pay all or part of the final rental. If the asset’s value is well below the final rental it leaves the lessor exposed to default by the lessee.
The operating lessor takes an equity risk and hopes the market for its asset will reward it accordingly at the end of the lease period. But nothing is certain. The operating lessor's risk is that no-one will want to hire its asset, or they won't be prepared to pay the price it expects, or the asset is defective or wears out faster than expected. But the operating lessor could make a lot more money than a banker if it is successful and there is a big demand for its asset at good prices, the asset is durable and so on.
With some assets this may not involve much risk; for example, a fleet of cars tends to have, in the aggregate, a relatively predictable minimum residual value in two years' time. Alternatively, risk can be reduced by insurance arrangements but the lessor needs to take care that such arrangements do not convert the lease into a finance lease.
Broadly, an operating lessor needs to manage its leased assets actively and needs expertise in the potential market for their use, choosing them, and maintaining them. For example, a plant hire firm needs to understand the market for the short-term hire of trucks, bulldozers, compressors etc. They need to have the right selection of plant to meet the demand without being left with a surplus. They need to pick plant which is reliable, easy to service and will have a good resale value. They have to understand the hardware as well as the market.
This is in contrast to typical finance lessors who generally don't need to know anything more about the plant or machinery or the market for it. They generally simply make a lender's financial judgment about the ability of the lessee to pay the rentals. Any value in the asset is returned to the lessee if the asset is sold.
In some cases, particularly where the lease has a substantial final rental, a finance lessor may need to have some knowledge of the asset’s market value. This is because the lease will be structured so that the asset is sold at the end of the lease term, with the sales proceeds being used to pay all or part of the final rental. If the asset’s value is well below the final rental it leaves the lessor exposed to default by the lessee.
Tuesday, 19 May 2009
Balance Sheet advanatges of Operating Leases
Balance Sheet Advantages: improving the appearance of balance sheets
Operating leases do not feature on the lessee’s balance sheet. Where the lease performs a financing function it allows what amounts to borrowing to be left off the borrower’s (lessee’s) balance sheet.
In contrast, if the lease is a finance lease, both the asset and the associated borrowing appear on the lessee’s balance sheet.
The use of operating leases as a source of off balance sheet finance is of concern to accountants. As at 2007, the IASB has been looking at the existing standards for several years and a leasing project is currently under way, the primary objective of which is to develop a model for the recognition of assets and liabilities arising under lease contracts, and for the measurement of those assets and liabilities, that is consistent with the international accounting framework definitions and other international accounting standards.
Operating leases do not feature on the lessee’s balance sheet. Where the lease performs a financing function it allows what amounts to borrowing to be left off the borrower’s (lessee’s) balance sheet.
In contrast, if the lease is a finance lease, both the asset and the associated borrowing appear on the lessee’s balance sheet.
The use of operating leases as a source of off balance sheet finance is of concern to accountants. As at 2007, the IASB has been looking at the existing standards for several years and a leasing project is currently under way, the primary objective of which is to develop a model for the recognition of assets and liabilities arising under lease contracts, and for the measurement of those assets and liabilities, that is consistent with the international accounting framework definitions and other international accounting standards.
Rebates of leasing rentals
Finance Leases: rebates of rentals
A finance lease is a lease that transfers substantially all the risks and rewards of ownership of the asset to the lessee. At any time from the end of the primary period (and sometimes from an earlier point) the lessee is therefore generally entitled to require the lessor to sell the asset and pay the majority (often over 99%) of the net sale proceeds to the lessee by way of rental rebate. The net sale proceeds are the sale proceeds less any amount that might be due by way of rent.
The lessor is usually entitled to retain only a trivial proportion of the net sale proceeds. In addition to this retention the lessor is also entitled to ensure that, if the need arises, it recoups its capital investment plus interest on the outlay either out of the sale proceeds or by way of a further 'termination rental'.
The object of both the rebate of rentals and the termination rental is to ensure that the lessor recoups its net cost plus an amount that is equivalent to interest on the loan.
Exceptionally, the lessor might seek additional payments where a lease is terminated early.
A finance lease is a lease that transfers substantially all the risks and rewards of ownership of the asset to the lessee. At any time from the end of the primary period (and sometimes from an earlier point) the lessee is therefore generally entitled to require the lessor to sell the asset and pay the majority (often over 99%) of the net sale proceeds to the lessee by way of rental rebate. The net sale proceeds are the sale proceeds less any amount that might be due by way of rent.
The lessor is usually entitled to retain only a trivial proportion of the net sale proceeds. In addition to this retention the lessor is also entitled to ensure that, if the need arises, it recoups its capital investment plus interest on the outlay either out of the sale proceeds or by way of a further 'termination rental'.
The object of both the rebate of rentals and the termination rental is to ensure that the lessor recoups its net cost plus an amount that is equivalent to interest on the loan.
Exceptionally, the lessor might seek additional payments where a lease is terminated early.
what is primary and secondary periods?
Finance leases: primary and secondary periods
A finance lease is usually split into 'primary' and 'secondary' periods. The 'loan' (with the 'interest') is repaid during the primary period. Once that is over the lessee usually has the option to continue to hire the asset for a nominal rent during the secondary period, either indefinitely or for at least the remaining useful life of the asset.
The structure of the lease is crucial to the nature of a finance lease
• the primary lease period protects the lessor: it ensures that the loan implied in the lease is repaid just as it would be under an actual loan;
• the secondary lease period protects the lessee: it recognises that the lessee has acquired economic ownership of the asset and that, without legal title to the asset, the lease must protect the lessee's right to carry on using the asset.
Rentals payable in the secondary period are usually nominal, reflecting the fact that the lessee has repaid what amounts to the loan. The secondary period rentals are often essentially just sufficient to cover the lessor’s administration costs.
It should be noted that leases are often structured in this way because the parties wish to avoid any provision under which the lessee might become the owner of plant or machinery (and so the lessee can’t simply acquire the asset at the end of the primary period). If they are not, CAA2001/S67 may apply and treat the lessee (not the lessor) as the owner for capital allowances purposes.
A finance lease is usually split into 'primary' and 'secondary' periods. The 'loan' (with the 'interest') is repaid during the primary period. Once that is over the lessee usually has the option to continue to hire the asset for a nominal rent during the secondary period, either indefinitely or for at least the remaining useful life of the asset.
The structure of the lease is crucial to the nature of a finance lease
• the primary lease period protects the lessor: it ensures that the loan implied in the lease is repaid just as it would be under an actual loan;
• the secondary lease period protects the lessee: it recognises that the lessee has acquired economic ownership of the asset and that, without legal title to the asset, the lease must protect the lessee's right to carry on using the asset.
Rentals payable in the secondary period are usually nominal, reflecting the fact that the lessee has repaid what amounts to the loan. The secondary period rentals are often essentially just sufficient to cover the lessor’s administration costs.
It should be noted that leases are often structured in this way because the parties wish to avoid any provision under which the lessee might become the owner of plant or machinery (and so the lessee can’t simply acquire the asset at the end of the primary period). If they are not, CAA2001/S67 may apply and treat the lessee (not the lessor) as the owner for capital allowances purposes.
VAN TAX
The annual cash equivalent of the benefit of vans is £3,000 for the 2008/09 tax year.
Please note that private use applies where the van is available whether it is used or not.Employees who use their vans for business use only, except insignificant personal use, have no tax liability.
If an employer provides fuel for private use, an additional Benefit in Kind liability of £500 applies.
Please note that private use applies where the van is available whether it is used or not.Employees who use their vans for business use only, except insignificant personal use, have no tax liability.
If an employer provides fuel for private use, an additional Benefit in Kind liability of £500 applies.
Friday, 15 May 2009
Leasing & Capital Allowances
Asset Finance & capital Allowances
The availability (or not) of capital allowances to a lessor is often crucial to a business in deciding whether to enter into a lease, particularly a finance lease, but also in the case of some operating leases, especially where the lease is used to provide off balance sheet finance.
Prior to FA 2006 any plant or machinery allowances due normally went to the legal owner of the asset (the lessor). The benefits that could arise from capital allowances in broad terms is to reduce what amounts to the cost of borrowing. That is the ‘interest element’ of finance lease rentals for an asset costing a particular amount could be less than the interest payable on a loan for the same amount.
This benefit often affected the decision on whether to buy or lease an asset. This distortion of business decisions was addressed in FA 2006 with the introduction of a new regime for taxing long funding leases of plant or machinery. These rules move the right to capital allowances from lessor to lessee, thus removing the benefit previously enjoyed by lessors where the lease is a long funding lease.
In some circumstances, particularly where the asset had a short economic life, lessors actually suffered a disadvantage if they needed to claim capital allowances.
If the lessee incurs capital expenditure and there is a purchase option in a lease of plant or machinery the capital allowances may (but may not) go the lessee.
Industrial buildings allowances (including allowances for buildings in enterprise zones) go to the holder of the 'relevant interest'
The availability (or not) of capital allowances to a lessor is often crucial to a business in deciding whether to enter into a lease, particularly a finance lease, but also in the case of some operating leases, especially where the lease is used to provide off balance sheet finance.
Prior to FA 2006 any plant or machinery allowances due normally went to the legal owner of the asset (the lessor). The benefits that could arise from capital allowances in broad terms is to reduce what amounts to the cost of borrowing. That is the ‘interest element’ of finance lease rentals for an asset costing a particular amount could be less than the interest payable on a loan for the same amount.
This benefit often affected the decision on whether to buy or lease an asset. This distortion of business decisions was addressed in FA 2006 with the introduction of a new regime for taxing long funding leases of plant or machinery. These rules move the right to capital allowances from lessor to lessee, thus removing the benefit previously enjoyed by lessors where the lease is a long funding lease.
In some circumstances, particularly where the asset had a short economic life, lessors actually suffered a disadvantage if they needed to claim capital allowances.
If the lessee incurs capital expenditure and there is a purchase option in a lease of plant or machinery the capital allowances may (but may not) go the lessee.
Industrial buildings allowances (including allowances for buildings in enterprise zones) go to the holder of the 'relevant interest'
How does a Hire Purchase Contract Work?
A hire purchase (HP) contract is a type of finance lease where the user has the option to purchase the asset at the end of the hire period, typically for a nominal sum. In terms of economic effects the differences between a hire purchase contract and an ordinary finance lease are limited. In both cases the user of the asset enjoys the risks and rewards of ownership. But the distinction between the two has significant tax consequences for the purposes of plant or machinery capital allowances:
• the finance lessor gets the allowances, not the finance lessee;
• the hire purchase lessee gets the allowances, not the hire purchase lessor.
The parties will usually choose whether or not to enter into a hire purchase contract to maximise the use of the available capital allowances.(see post below)
Contracts for the hire of an asset that contain a provision giving the hirer an option to acquire title to the asset upon the fulfilment of agreed conditions, sometimes known as HP or lease purchase contracts, fall within the definition of a lease for accounting purposes. For accounting purposes no special classification exists for HP contracts, instead they are classified, and accounted for, as finance leases or operating leases, depending on the nature of the contract. Most HP contracts, which typically have a nominal purchase price, are classified as finance leases. However, in the case where the option to purchase the asset at the end of the hire period is set at a relatively high price (typically around market value), such that the hirer may not exercise the option to buy, the HP contact will be treated as an operating lease.
• the finance lessor gets the allowances, not the finance lessee;
• the hire purchase lessee gets the allowances, not the hire purchase lessor.
The parties will usually choose whether or not to enter into a hire purchase contract to maximise the use of the available capital allowances.(see post below)
Contracts for the hire of an asset that contain a provision giving the hirer an option to acquire title to the asset upon the fulfilment of agreed conditions, sometimes known as HP or lease purchase contracts, fall within the definition of a lease for accounting purposes. For accounting purposes no special classification exists for HP contracts, instead they are classified, and accounted for, as finance leases or operating leases, depending on the nature of the contract. Most HP contracts, which typically have a nominal purchase price, are classified as finance leases. However, in the case where the option to purchase the asset at the end of the hire period is set at a relatively high price (typically around market value), such that the hirer may not exercise the option to buy, the HP contact will be treated as an operating lease.
Commercial mortgages
Commercial mortgages from Yellow Note trawl the UK market so you don't have to. Our panel of commercial mortgage finance companies and lenders are waiting to help you. Just complete our quick form below and we will provide you with quotations for the finance you need.
1.We Provide Consistently Competitive Commercial Mortgages Through Premier League Funders and Sub Prime Funders And Partners.
2.We Deliver a Tailored Commercial Mortgage Service On a One-to-One Basis.
3.Our Friendly and Knowledgeable Staff Will Guide You Every Step of The Way.
4.We Are Also Able to Provide The New Government EFG (Enterprise Finance Guarantee) Scheme To Increase Any Shortfalls.
Commercial mortgages can be used for purchasing new premises, purchase of a business, refinance of a business, refurbishment/expansion of premises, discharge of existing debt, buy out of a partner, outstanding vat, Bridging and much more.
1.We Provide Consistently Competitive Commercial Mortgages Through Premier League Funders and Sub Prime Funders And Partners.
2.We Deliver a Tailored Commercial Mortgage Service On a One-to-One Basis.
3.Our Friendly and Knowledgeable Staff Will Guide You Every Step of The Way.
4.We Are Also Able to Provide The New Government EFG (Enterprise Finance Guarantee) Scheme To Increase Any Shortfalls.
Commercial mortgages can be used for purchasing new premises, purchase of a business, refinance of a business, refurbishment/expansion of premises, discharge of existing debt, buy out of a partner, outstanding vat, Bridging and much more.
Factoring & Invoice Discounting
Invoice Discounting & Factoring
Invoice Discounting - What Is It?
Our Invoice Discounting service means that we can help you improve your cash flow by providing an immediate injection of cash against the value of your outstanding invoices. Then as you raise an invoice, we can release up to 85% of the value of that invoice within 24 hours. The remaining 15%, less a small service fee, will be paid to you once your customers pay.
This means your business has access to an ongoing supply of cash linked to your sales. So as your business grows so does the amount of funding available to you.
How Does Invoice Discounting Work?
Firstly, we provide your business with an initial injection of cash - up to 85% of the value of your outstanding invoices. Then as you raise sales invoices and credit notes you send them to us and we convert up to 85% of these into cash within 24 hours. The remaining 15% will be paid to you once your customers pay their invoices. This cash is then available to be used as and when you choose.
Your customers make payments to us via a specialist bank account.
With our Invoice Discounting/Factoring service you can also choose to have a Purchase Card (at no additional cost), which means that you can use the funds we make available to make purchases as and when you want. All transactions made on your purchase card will be reported on your normal statement. Additional cards can also be made available for members of your team to cover fuel purchases, lunch, expenses etc.
What Next?
If you would like to speak with one of our Invoice Discounting specialists simply complete our online enquiry form. Alternatively you can call us on 07040 900 568.
Just complete our quick form below and we will provide you with quotations for the finance you need.
Invoice Discounting - What Is It?
Our Invoice Discounting service means that we can help you improve your cash flow by providing an immediate injection of cash against the value of your outstanding invoices. Then as you raise an invoice, we can release up to 85% of the value of that invoice within 24 hours. The remaining 15%, less a small service fee, will be paid to you once your customers pay.
This means your business has access to an ongoing supply of cash linked to your sales. So as your business grows so does the amount of funding available to you.
How Does Invoice Discounting Work?
Firstly, we provide your business with an initial injection of cash - up to 85% of the value of your outstanding invoices. Then as you raise sales invoices and credit notes you send them to us and we convert up to 85% of these into cash within 24 hours. The remaining 15% will be paid to you once your customers pay their invoices. This cash is then available to be used as and when you choose.
Your customers make payments to us via a specialist bank account.
With our Invoice Discounting/Factoring service you can also choose to have a Purchase Card (at no additional cost), which means that you can use the funds we make available to make purchases as and when you want. All transactions made on your purchase card will be reported on your normal statement. Additional cards can also be made available for members of your team to cover fuel purchases, lunch, expenses etc.
What Next?
If you would like to speak with one of our Invoice Discounting specialists simply complete our online enquiry form. Alternatively you can call us on 07040 900 568.
Just complete our quick form below and we will provide you with quotations for the finance you need.
Merchant Cash Flow Finance
Merchant Cash Advance From Yellow Note can arrange funding for any business purpose. This new concept allows access to quick cash based solely on future credit and debit card payments. Totally unsecured, we can arrange funds paid directly to you within 10 days. Just complete our quick form above and we will provide you with the cash for your business
How does Merchant Cashflow work?
*We Provide Funds Against Future Credit And Debt Card Sales Up To £40,000.
*Amount Funded Is Based on Average Monthly Volume Of Credit/Debit CardTransactions.
*Your Business Can Expect To Receive A Lump Sum Roughly Equivalent To The Monthly Average.
What are the Benefits?
*No application fees or hidden charges, and a simple application process.
*Money on the merchant’s account 10 working days after application.
*No security required.
*No audited accounts or tax returns required.
*No fixed payments – we get paid when the merchant gets paid.
Which Sectors are eligible?
*Pubs, Clubs, Wine Bars, Restaurants, Hotels, Hair & Beauty, Florists, Automotive repairs, Pharmacists
*Dry Cleaners, Shoe Repairs, Sports Shops, Cycle Shops, Butchers, Green Grocers, Garden Centres
*Cash & Carry, Off Licences, Pet Care, Builders Merchants, Jewellers and more.
Just complete our quick form below and we will provide you with quotations for the finance you need.
How does Merchant Cashflow work?
*We Provide Funds Against Future Credit And Debt Card Sales Up To £40,000.
*Amount Funded Is Based on Average Monthly Volume Of Credit/Debit CardTransactions.
*Your Business Can Expect To Receive A Lump Sum Roughly Equivalent To The Monthly Average.
What are the Benefits?
*No application fees or hidden charges, and a simple application process.
*Money on the merchant’s account 10 working days after application.
*No security required.
*No audited accounts or tax returns required.
*No fixed payments – we get paid when the merchant gets paid.
Which Sectors are eligible?
*Pubs, Clubs, Wine Bars, Restaurants, Hotels, Hair & Beauty, Florists, Automotive repairs, Pharmacists
*Dry Cleaners, Shoe Repairs, Sports Shops, Cycle Shops, Butchers, Green Grocers, Garden Centres
*Cash & Carry, Off Licences, Pet Care, Builders Merchants, Jewellers and more.
Just complete our quick form below and we will provide you with quotations for the finance you need.
Asset Finance
Asset Finance: “In the midst of the credit crunch businesses are finding it increasingly difficult to access business funding.”
In the current economic climate, businesses are now more than ever likely to be concerned about the consequences of the credit crunch. 2009 has proved to be a tough year as lenders have reined in their lending criteria making it difficult and more expensive for the borrower.
Capital is the life blood of any company; if equipment or vehicles are required, you should have a range of lease and purchase options. If premises are sought, you should have a full range of secured loans and commercial mortgage facilities available to you but most importantly, if your business needs capital, you should have access to a wide range of finance and lines of credit.
At Yellow Note Asset Finance we are one point of contact to the lending market. We have access to a wide panel of lenders who are still very much keen to lend.
Traditional facilities include;
- Hire purchase
- Leasing
- Operating lease
- Invoice discounting (alternative to overdrafts)
- Refinance (balloons, cash injections)
Sunday, 3 May 2009
Tuesday, 21 April 2009
Franchise Finance
Franchise Finance from Yellow Note trawl the UK market so you don't have to. Our panel of top-drawer Franchising Finance lenders & Leasing companies are waiting to help you.
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We Provide Franchise Facilities From Shop Fit To Catering Equipment For Any Franchise (Coffee, Food to Domestics Franchises) Through Prime Funders and Sub Prime Funders.
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We Deliver a Tailored Service For Your Franchise On a One-to-One Basis With Low Deposits And Seasonal Payments To Compliment Your Cashflow.
-
Customers Range From New Businesses to Large Established Franchises.
-
Wide Range of Asset Finance Facilities.
-
We Are Able To Provide Multiple Credit Lines Across Many Lenders & Financial Institutions For Your Franchise Opportunity.
Just complete our quick form on our asset finance website and we will provide you with quotations for the finance you need.
Asset Finance For Businesses
Asset Finance & Business Finance
The lending market over the last 18 months has seen dramatic changes in lending criteria's. Capital is the life blood of any company; if equipment or vehicles are required, you should have a range of lease and purchase options. If premises are sought, you should have a full range of secured loans and commercial mortgage facilities available to you but most importantly, if your business needs capital, you should have access to a wide range of finance and lines of credit.
Who is Yellow Note Asset Finance?
Yellow Note Asset Finance are specialists at providing funding for a range of capital purchases to businesses both large and small. Asset finance and equipment leasing enables companies to obtain funding for the purchase of assets they need to run & grow their businesses successfully. With access to over 30 lenders and financial institutions, we have helped many businesses to acquire business finance for the assets they need to run their business successfully.
Funding from £3k to £10million.
Facilities available for all types of credit.
Rates from 2.9% flat.
Funding for standard and non standard assets.
What products do we offer?
Asset Finance
Bus Finance
Coach Finance
Machinery Finance
Technology Finance
Truck Finance
Trailer Finance
Refinance
Franchise Finance
Commercial Vehicles
Restaurant & Shop fit
Catering & Pubs
Cashflow Finance
Factoring
Commercial Mortgages
Business Finance
Business Loans
The lending market over the last 18 months has seen dramatic changes in lending criteria's. Capital is the life blood of any company; if equipment or vehicles are required, you should have a range of lease and purchase options. If premises are sought, you should have a full range of secured loans and commercial mortgage facilities available to you but most importantly, if your business needs capital, you should have access to a wide range of finance and lines of credit.
Who is Yellow Note Asset Finance?
Yellow Note Asset Finance are specialists at providing funding for a range of capital purchases to businesses both large and small. Asset finance and equipment leasing enables companies to obtain funding for the purchase of assets they need to run & grow their businesses successfully. With access to over 30 lenders and financial institutions, we have helped many businesses to acquire business finance for the assets they need to run their business successfully.
As an independent broker we are able to source and arrange tailor made facilities to match your cashflow, our team of asset finance specialists understands the unique requirements of individual business.
Funding from £3k to £10million.
Facilities available for all types of credit.
Rates from 2.9% flat.
Funding for standard and non standard assets.
What products do we offer?
Asset Finance
Bus Finance
Coach Finance
Machinery Finance
Technology Finance
Truck Finance
Trailer Finance
Refinance
Franchise Finance
Commercial Vehicles
Restaurant & Shop fit
Catering & Pubs
Cashflow Finance
Factoring
Commercial Mortgages
Business Finance
Business Loans
Asset Finance Website
We have recently updated our Asset Finance website, to view our website please click here Asset Finance Page Rank 2
Thursday, 9 April 2009
Restaurant, Pub and Hotel Finance-Cashflow Finance
The government have been encouraging UK lenders to increase lending to the UK
How The Funding Program Works:
Hoteliers and restaurateurs can now borrow unsecured funds based on current debit and credit sales. The lend is based on an average monthly volume of credit/debit card transactions. A merchant can expect to receive a lump sum roughly equivalent to this monthly average. The money advanced to the merchant is not a loan, it is purchasing an amount of the merchant’s future debit and credit card receivables.
Advantages:
£ No application fees or hidden charges, and a simple application process.
£ Money on the merchant’s account 10 working days after application.
£ No security required.
£ No audited accounts or tax returns required.
£ No fixed payments – The lender gets paid when the merchant gets paid.
What A Merchant Needs To Get Started:
1. Submit 12 months card processor statements.
2. 3 Trade References.
3. Landlord Information and 1 year remaining on their lease.
4. An average of at least £3,500 per month in credit/debit card sales.
Saturday, 4 April 2009
Repossessions | Repossessed Stock
Sign up for our newsletter and be the first to know about repossession updates
or call +44 (0) 07040 900 768
Asset: Aston Martin DB9 Volante 2007 (57)
Onyx Black with Sandstrom & Black Hide,
Black Piano Wood, SAT NAV, Elect Heated Seats, Climate Control, CD Multichanger,
ONLY 2,000 Miles!
Price..........................................£99,995
(Balloon Payment Available)
Sold
Asset: BMW 630i Sport Cabriolet
2 Doors, Automatic, Convertible, Petrol, 23,500 miles, Metallic Grey. ABS, Alarm, Alloy wheels, Audio remote control,
Price
.........................£26,000.00
Asset: Ferrari 550 World Speed Record 2000 (W)
124000 miles
£..........................£54,995.00
Sold
Asset: Range Rover Sport 4.2 Supercharged Tip Auto V8 2006 (06)
Black Leather Interior, Touch Screen Sat Nav, Harman/Kardon Sound System with 6CD Changer, Elec Heated Seats, Climate Control, Steering Wheel Controls, Cruise Control, Auto Headlights, Parking Sensors, 20’ Alloy Wheels, Sidesteps, Trip Computer, 23,000 Miles
Sold
Asset: Audi RS4 Quattro 4.2 V8 2007 (07)
9,000 Miles, SAT NAV, Climate, Black Leather Interior, Elec Heated Heats, CD Changer, Cruise Control, 6 Speed, Trip Computer, Elec Heated Mirrors, 19 inch alloys, Bose Sound System, Xenon Headlights
Price..............................................£37,950
(Balloon Payment Available)
Sold
Asset: Rolls Royce Corniche 2002
31,041 miles
£....POA
Asset: BMW X5 3.0D Sport Auto 2006 (06)
Silver Metallic with Black Leather Interior, Comms Pack with TV, Bluetooth Phone, Elec Memory Seats, Climate Control, Cruise Control, CD Multichanger, Side Running Boards, 20 Inch alloy wheels, Full BMW Service History, 14,000 Miles
Price.............................................£26,995
Sold
Asset: Rolls Royce Silver Spirit II 1990
37,144 miles
£....POA
Asset: BMW 525i Auto SE 2006 (56)
40,000 Miles, Full Service History, Grey Leather,
Dual Climate Control, Cruise Control, Auto Headlights, Rear Blinds, Elect Seats and Mirrors, CD Radio, Navigation System
Price............................................£18,450
Sold
Asset: 2007 (57) BMW 320d M Sport
Leather seats (heated), Bluetooth phone pack, IPod upgrade, Rear spoiler
18’’ Alloys, Run flat tyres, Dimming mirror 23,000 miles
Price..........................£19,000.00
Asset: Aston Martin DB7 Vantage
2000 (W)
27,719 miles
£........POA
Asset: Audi A4 2.0 Tdi TDV Sline
2006 (56)
17,500 miles
£........POA (similar vehicle due in soon!)
Asset: 2004 (04) AUDI S4 Quattro Cabriolet
2 Doors, Manual, Cabriolet, Petrol, 75,000 miles, Black. ABS, Alarm, Alloy wheels, Climate control,
Electric door mirrors, Electrically adjustable drivers seat, Electrically adjustable passenger seat, Front electric windows,
Price........................£12,500.00
Asset: MAN ROLAND R305L PRESS
Man Roland R305L five colour perfector sheet fed offset press with coater, UV drying, alcohol damping, semi automatic plate change, auto make ready & wash up, a Pecom system with CIP 3 integration & CCI colour control, max sheet size 740mmx530mm, 75m impressions
YOM 2003 S/NO. 30740B
Asset: 1996 Komori LR440A
Reel loading ‘assist’ rail and trolley
MEG DLC auto plaster with integrated infeed
E&L web guide system located at infeed and after chill rolls
Web catchers located pre first unit and before drying oven
4 x print units – double circumference, single width
Meg air therm 9 metre gas drying oven with integrated ‘piggy back’ afterburner
1990 Toyo Denki 250kw main motor
Plate bender
Control desk with: Quad Tech RGS 1V series X print to cut register system
Remote control ink desks
Remote plate cylinder lateral and circumferential register
18764/SS/HP @ £325,000.00
Asset:
1999 Scania 6x4
Armcon Cementech 6M-150 Mobile
Concrete Batch Plant (s/n 31220)
(ref 018886)
Asset: A choice of Volvo FH12 Tractor Units.
Globetrotter XL cabs
Prestige Trim,
6x2 Midlifts
Sliding 5th Wheel
Eminox Vertical exhausts
2005 (55) from £21,995
2004 (54) from £19,995
Asset: 2003 (52) DAF 95-430 Space Cab
6X2 Mid Lift, Sliding Fifth Wheel,
Sun Visor, Manual Gear Box,
781k kms
£9,950.00
Asset: 2000/02 Thwaites 2 Ton Dumpers
(7 off)
(18902, 18903)
Price..........£2,000 - £2,500
Asset: 2002 Merlo 35.14 telehandler
4436 hours
(18901)
Price.......£12,950
Asset: 2001 Merlo 35.13 telehandler
(18901)
Price................£14,000
Asset: 2003 Merlo 30.9 telehandler
4083 hours
(18902)
Price...............£12,500
Asset: 2004 Daewoo 30T Excavator Long Reach
(19104)
Price...............£54,950
Asset: 2001 Viper 302 Screener
Price................£20,000
Asset: 2006 McCloskey 302 Voyager Screener
Price.......................£45,000
Asset: 2007 Thwaites Dumper 6 Ton,
Hours 527
(ref 18904)
Price.......................£8,950
Asset: 2007 JCB 8080R Rubber Tracked Excavator
c/w Quick Hitch, Hammer Circuit
Hours 1565
(ref 18904)
Price....................£24,950
Asset: 2008 Doosan DX140LC
used 360 Degree Slew Tracked Hydraulic Excavator
c/w Mono Boom, Hydraulic Check Valves,
Hammer Pipes, Quick Hitch, Four Buckets,
Overload Warning System, Cab Protection Guards
Price...................£40,000
Asset: 2001 PEGSON PREMIERTRAK
used-1100X650 JAW CRUSHER (ref: 19227)
Price.............£55,000
Asset: 2 x 2004 DAEWOO SOLAR 225 LC-V EXCAVATORS
(19113) Used
Price.............£42,950 each
Asset: 2005 John Deere 1470D Harvester
c/w H758 Head
Hours 6221
(ref 18123)
£P.O.A
Asset: 2005 John Deere 1410D Forwarder
Hours 6120
(ref 18123)
Price.....................£P.O.A
Asset: 2002 Valmet 921.1 Harvester
c/w 2003 Valmet 370 Harvesting Head,
Hours 8698
(ref 19040)
Price.................£75,000
Asset: 2000 Ponsee HS16 Ergo Harvester
c/w H73 Harvesting Head,
1 set of tracks
(ref 19176)
Price......................£40,000
Asset: 2002 Timberjack 1470D Harvester
c/w H758 Harvesting Head,
Hours 8742
(ref 18812)
Price.........................£75,000
Asset: 2005 Timberjack 1410D Forwarder
Hours 3390
(ref 19255)
Price.....................£77,500
Asset: 2006 MODEL LOGSET 10H HARVESTER
c/w 2006 Model Logset 8X Harvester Head
2813 hours
(Ref 18850)
Price.....................£175,000.00
Asset: 2002 Ponsee Ergo Timber Harvester
C/W Reconditioned H73 Harvesting Head
YOM 1998
Price................£60,000.00
Asset: 1996 Ponsee Cobra Harvester HS10
c/w 1997 H60 Harvesting Head,
Tracks
13,802 hours
Price................£25,000
Yellow Note Asset Finance
07040 900 768
or call +44 (0) 07040 900 768
Asset: Aston Martin DB9 Volante 2007 (57)
Onyx Black with Sandstrom & Black Hide,
Black Piano Wood, SAT NAV, Elect Heated Seats, Climate Control, CD Multichanger,
ONLY 2,000 Miles!
Price..........................................£99,995
(Balloon Payment Available)
Sold
Asset: BMW 630i Sport Cabriolet
2 Doors, Automatic, Convertible, Petrol, 23,500 miles, Metallic Grey. ABS, Alarm, Alloy wheels, Audio remote control,
Price
.........................£26,000.00
Asset: Ferrari 550 World Speed Record 2000 (W)
124000 miles
£..........................£54,995.00
Sold
Asset: Range Rover Sport 4.2 Supercharged Tip Auto V8 2006 (06)
Black Leather Interior, Touch Screen Sat Nav, Harman/Kardon Sound System with 6CD Changer, Elec Heated Seats, Climate Control, Steering Wheel Controls, Cruise Control, Auto Headlights, Parking Sensors, 20’ Alloy Wheels, Sidesteps, Trip Computer, 23,000 Miles
Sold
Asset: Audi RS4 Quattro 4.2 V8 2007 (07)
9,000 Miles, SAT NAV, Climate, Black Leather Interior, Elec Heated Heats, CD Changer, Cruise Control, 6 Speed, Trip Computer, Elec Heated Mirrors, 19 inch alloys, Bose Sound System, Xenon Headlights
Price..............................................£37,950
(Balloon Payment Available)
Sold
Asset: Rolls Royce Corniche 2002
31,041 miles
£....POA
Asset: BMW X5 3.0D Sport Auto 2006 (06)
Silver Metallic with Black Leather Interior, Comms Pack with TV, Bluetooth Phone, Elec Memory Seats, Climate Control, Cruise Control, CD Multichanger, Side Running Boards, 20 Inch alloy wheels, Full BMW Service History, 14,000 Miles
Price.............................................£26,995
Sold
Asset: Rolls Royce Silver Spirit II 1990
37,144 miles
£....POA
Asset: BMW 525i Auto SE 2006 (56)
40,000 Miles, Full Service History, Grey Leather,
Dual Climate Control, Cruise Control, Auto Headlights, Rear Blinds, Elect Seats and Mirrors, CD Radio, Navigation System
Price............................................£18,450
Sold
Asset: 2007 (57) BMW 320d M Sport
Leather seats (heated), Bluetooth phone pack, IPod upgrade, Rear spoiler
18’’ Alloys, Run flat tyres, Dimming mirror 23,000 miles
Price..........................£19,000.00
Asset: Aston Martin DB7 Vantage
2000 (W)
27,719 miles
£........POA
Asset: Audi A4 2.0 Tdi TDV Sline
2006 (56)
17,500 miles
£........POA (similar vehicle due in soon!)
Asset: 2004 (04) AUDI S4 Quattro Cabriolet
2 Doors, Manual, Cabriolet, Petrol, 75,000 miles, Black. ABS, Alarm, Alloy wheels, Climate control,
Electric door mirrors, Electrically adjustable drivers seat, Electrically adjustable passenger seat, Front electric windows,
Price........................£12,500.00
Asset: MAN ROLAND R305L PRESS
Man Roland R305L five colour perfector sheet fed offset press with coater, UV drying, alcohol damping, semi automatic plate change, auto make ready & wash up, a Pecom system with CIP 3 integration & CCI colour control, max sheet size 740mmx530mm, 75m impressions
YOM 2003 S/NO. 30740B
Asset: 1996 Komori LR440A
Reel loading ‘assist’ rail and trolley
MEG DLC auto plaster with integrated infeed
E&L web guide system located at infeed and after chill rolls
Web catchers located pre first unit and before drying oven
4 x print units – double circumference, single width
Meg air therm 9 metre gas drying oven with integrated ‘piggy back’ afterburner
1990 Toyo Denki 250kw main motor
Plate bender
Control desk with: Quad Tech RGS 1V series X print to cut register system
Remote control ink desks
Remote plate cylinder lateral and circumferential register
18764/SS/HP @ £325,000.00
Asset:
1999 Scania 6x4
Armcon Cementech 6M-150 Mobile
Concrete Batch Plant (s/n 31220)
(ref 018886)
Asset: A choice of Volvo FH12 Tractor Units.
Globetrotter XL cabs
Prestige Trim,
6x2 Midlifts
Sliding 5th Wheel
Eminox Vertical exhausts
2005 (55) from £21,995
2004 (54) from £19,995
Asset: 2003 (52) DAF 95-430 Space Cab
6X2 Mid Lift, Sliding Fifth Wheel,
Sun Visor, Manual Gear Box,
781k kms
£9,950.00
Asset: 2000/02 Thwaites 2 Ton Dumpers
(7 off)
(18902, 18903)
Price..........£2,000 - £2,500
Asset: 2002 Merlo 35.14 telehandler
4436 hours
(18901)
Price.......£12,950
Asset: 2001 Merlo 35.13 telehandler
(18901)
Price................£14,000
Asset: 2003 Merlo 30.9 telehandler
4083 hours
(18902)
Price...............£12,500
Asset: 2004 Daewoo 30T Excavator Long Reach
(19104)
Price...............£54,950
Asset: 2001 Viper 302 Screener
Price................£20,000
Asset: 2006 McCloskey 302 Voyager Screener
Price.......................£45,000
Asset: 2007 Thwaites Dumper 6 Ton,
Hours 527
(ref 18904)
Price.......................£8,950
Asset: 2007 JCB 8080R Rubber Tracked Excavator
c/w Quick Hitch, Hammer Circuit
Hours 1565
(ref 18904)
Price....................£24,950
Asset: 2008 Doosan DX140LC
used 360 Degree Slew Tracked Hydraulic Excavator
c/w Mono Boom, Hydraulic Check Valves,
Hammer Pipes, Quick Hitch, Four Buckets,
Overload Warning System, Cab Protection Guards
Price...................£40,000
Asset: 2001 PEGSON PREMIERTRAK
used-1100X650 JAW CRUSHER (ref: 19227)
Price.............£55,000
Asset: 2 x 2004 DAEWOO SOLAR 225 LC-V EXCAVATORS
(19113) Used
Price.............£42,950 each
Asset: 2005 John Deere 1470D Harvester
c/w H758 Head
Hours 6221
(ref 18123)
£P.O.A
Asset: 2005 John Deere 1410D Forwarder
Hours 6120
(ref 18123)
Price.....................£P.O.A
Asset: 2002 Valmet 921.1 Harvester
c/w 2003 Valmet 370 Harvesting Head,
Hours 8698
(ref 19040)
Price.................£75,000
Asset: 2000 Ponsee HS16 Ergo Harvester
c/w H73 Harvesting Head,
1 set of tracks
(ref 19176)
Price......................£40,000
Asset: 2002 Timberjack 1470D Harvester
c/w H758 Harvesting Head,
Hours 8742
(ref 18812)
Price.........................£75,000
Asset: 2005 Timberjack 1410D Forwarder
Hours 3390
(ref 19255)
Price.....................£77,500
Asset: 2006 MODEL LOGSET 10H HARVESTER
c/w 2006 Model Logset 8X Harvester Head
2813 hours
(Ref 18850)
Price.....................£175,000.00
Asset: 2002 Ponsee Ergo Timber Harvester
C/W Reconditioned H73 Harvesting Head
YOM 1998
Price................£60,000.00
Asset: 1996 Ponsee Cobra Harvester HS10
c/w 1997 H60 Harvesting Head,
Tracks
13,802 hours
Price................£25,000
Yellow Note Asset Finance
07040 900 768
Tuesday, 31 March 2009
CASHFLOW FINANCE | FRACHISE FINANCE
We have launched a new finance product specifically designed for the leisure sector.
Cashflow Finance From Yellow Note can arrange funding for any business purpose. This new concept allows access to quick cash based solely in future card payments. Totally unsecured, we can arrange funds paid directly to you within 10 days. Just complete our quick form above and we will provide you with the cash for you business
How does cashflow work?
· We Provide Funds Against Future Credit And Debt Card Sales Up To £40,000.
· Amount Funded Is Based on Average Monthly Volume Of Credit/Debit Card Transactions.
· Your Business Can Expect To Receive A Lump Sum Roughly Equivalent To The Monthly Average.
What are the Benefits?
· No application fees or hidden charges, and a simple application process.
· Money on the merchant’s account 10 working days after application.
· No security required.
· No audited accounts or tax returns required.
· No fixed payments – we get paid when the merchant gets paid.
Which Sectors?
· Pub
· Wine Bar
· Restaurant
· Hotels/Guest Houses
· Hire Shops
· Hair/Beauty and more
Monday, 30 March 2009
Saturday, 28 March 2009
Franchise Finance | Restaurant Finance | Takeaway Finance | Catering Finance
Yellow Note Asset Finance has helped many businesses secure finance.
Recent Franchise Finance Transactions
1. We have recently completed a requirement for £30,000 to fund a new fish and chip shop based in Licolnshire.
2. £60,000 of equipment for a new start Indian Restaurant based in London.
3. £40,000 for refurbishments of a freehold pub based in Devon
4. £20,000 for Catering Equipment for an Italian restaurant based in Southampton.
To find out how we can help your businesses contact Yellow Note on 07040 900 768
Sunday, 15 March 2009
What is a lease?
Short Funded Finance lease
Definition: An agreement whereby the Lessee (customer) has right to use and derive economic benefit from the asset but where the Lessor (Finance company) retains ownership to the goods.
Features
Customer effectively rents the equipment from the finance company over a set term.
Finance company owns the asset and passes any tax benefits accrued back to the customer through lower costs in funding.
Rentals will attract vat.
“Deposit” is normally in the form of rentals in advance i.e.1, 3 or 6 payments in advance.
Funding periods are normally between 3 – 7 yrs with payment profiles normally either monthly or quarterly.
Payments are normally fixed through term.
After primary funding term customer can either sell the equipment on behalf of finance company normally retaining circa 97.5% of sales proceeds or pay annual renewal rentals at a pre-determined rate – normally 1% of initial net cost.
Tax / Balance Sheet
The borrowing company can offset depreciation cost of asset plus interest costs against taxable profits.
The asset is shown on the borrowing companies balance sheet as a fixed asset while the Finance Lease commitment is shown as a corresponding liability.
As finance company own the asset they claim W.D.A’s and reflect through the rentals.
As owners the finance company pay the VAT on purchase price and reclaim back in normal way.
Benefits
Flexibility
(i) Can terminate at any time during course of agreement and can benefit from share in any sales proceeds above the termination figure.
(ii) Has option to either to sell the equipment at end of primary period or pay annual renewal rentals.
(iii) Can retain the majority of sales proceeds if sold at end of primary term.
(iv) At end of primary term can continue to rent at peppercorn annual rental i.e. 1% of original cost.
Fixed repayments;
(i) Ease for budgeting purposes
(iii) No hidden / unknown additional costs
Tax benefits;
(i) As owner the finance company claim W.D.A’s & the benefits gained can be reflected as lower rentals to the customer.
(ii) Can claim depreciation & interest against corporation tax.
Other;
(i) Asset shown on balance sheet thus increasing worth of business.
(ii) Initial “deposit” requirement lower as customer is not required to pay vat on the purchase price thus provides cash flow benefit.
Negatives;
(i) The amount available to offset against taxable profits is generally lower than for Hire Purchase or Operating lease (depends on asset & depreciation policy).
(ii) Repayments can be more expensive than an operating lease / contract hire product i.e. 100% of cost being repaid over period.
(iii) Terminating leases early is expensive when compared with Hire Purchase.
Tuesday, 10 March 2009
What Is An Operating Lease?
Operating Lease
Definition: A lease that does not transfer substantially all the risks and rewards of ownership of an asset to the lessee i.e. where a residual stake taken by a third party results in the present value of the minimum lease payments amount to substantially less than 90% of the fair value of the lease asset.
Features
Customer rents the equipment from the finance company over a set term.
Either Finance company or third party takes a residual value within the goods, level determined by asset / return conditions etc.
Agreement does not normally include maintenance.
Rentals will attract vat.
“Deposit” is normally in the form of rentals in advance i.e.1,3 or 6 payments in advance.
Funding periods are normally between 3 – 7 yrs with payment profiles normally either monthly or quarterly.
Payments are fixed through term.
After primary funding term customer has the option to;
(i)Return the goods to the third party who has taken R.V position
(ii)Extend the agreement by paying extension rentals.
(iii)Sell the goods under a sales agency to a third party.
Tax / Balance Sheet
The borrowing company can offset the full rental against corporation tax.
The asset is not shown on the borrowing companies balance sheet instead it will be shown in the notes to the accounts as a contingent liability.
As finance company own the asset they claim W.D.A’s and reflect through the rentals.
Benefits
(i) Fixed repayments;
(ii)Ease for budgeting purposes
(iv)No hidden / unknown additional costs
Tax benefits;
(i)As owner the finance company claim W.D.A’s & the benefits gained can be reflected as lower rentals to the customer.
(ii)Can offset full rentals against corporation tax.
Other;
(i)Lower rentals during course of primary period when compared with Finance Lease and Hire Purchase thus improved profitability.
(ii)Improved balance sheet ratio’s i.e. Gearing & Return on Capital.
(iii)Cash flow benefit through lower rentals.
Negatives;
(i)The amount available to offset against taxable profits is generally lower than for Hire Purchase.
(ii)Terminating operating leases early is expensive when compared with Hire Purchase.
(iii)Potential unknown costs under return conditions.
Definition: A lease that does not transfer substantially all the risks and rewards of ownership of an asset to the lessee i.e. where a residual stake taken by a third party results in the present value of the minimum lease payments amount to substantially less than 90% of the fair value of the lease asset.
Features
Customer rents the equipment from the finance company over a set term.
Either Finance company or third party takes a residual value within the goods, level determined by asset / return conditions etc.
Agreement does not normally include maintenance.
Rentals will attract vat.
“Deposit” is normally in the form of rentals in advance i.e.1,3 or 6 payments in advance.
Funding periods are normally between 3 – 7 yrs with payment profiles normally either monthly or quarterly.
Payments are fixed through term.
After primary funding term customer has the option to;
(i)Return the goods to the third party who has taken R.V position
(ii)Extend the agreement by paying extension rentals.
(iii)Sell the goods under a sales agency to a third party.
Tax / Balance Sheet
The borrowing company can offset the full rental against corporation tax.
The asset is not shown on the borrowing companies balance sheet instead it will be shown in the notes to the accounts as a contingent liability.
As finance company own the asset they claim W.D.A’s and reflect through the rentals.
Benefits
(i) Fixed repayments;
(ii)Ease for budgeting purposes
(iv)No hidden / unknown additional costs
Tax benefits;
(i)As owner the finance company claim W.D.A’s & the benefits gained can be reflected as lower rentals to the customer.
(ii)Can offset full rentals against corporation tax.
Other;
(i)Lower rentals during course of primary period when compared with Finance Lease and Hire Purchase thus improved profitability.
(ii)Improved balance sheet ratio’s i.e. Gearing & Return on Capital.
(iii)Cash flow benefit through lower rentals.
Negatives;
(i)The amount available to offset against taxable profits is generally lower than for Hire Purchase.
(ii)Terminating operating leases early is expensive when compared with Hire Purchase.
(iii)Potential unknown costs under return conditions.
Monday, 9 March 2009
Why use a broker?
What are the benefits of using a broker?
For many years banks and lending institutions have dominated control over business finance. Banks and conventional lending institutions lend on specific criteria. The variation cost fluctuates from one lender to another on a daily basis and more recently due to the credit crunch lenders are differentiating themselves by wanting to operate in different marketplaces and by funding various types of equipment and funding structures.
The role of a broker is becoming ever more apparent and is a valuable tool for businesses in this current climate to acquire competitive rates and lending terms.
Benefits
1. A truly "independent" broker has access to the whole lending market and is able to present the client with the most suitable facility on an unbiased basis. A broker will also have access to private companies who lend only through brokers.
2. Spread asset risk-unfortunately some business still finance all of their business assets with one bank/finance institution, having a varied debtor portfolio minimises the risk of debts being foreclosed akin to the recent overdraft facilities.
3. Market Knowledge-Banks and financial institutions rates change on a regular basis* (can be weekly or monthly) a broker will have full access to lenders change in rates on a daily basis and will be able to source a competitive deal at that point in time.
* A full explanation to why lenders rates change will be explained in a upcoming post
4. The majority of businesses require finance for a wide range of assets from traditional wheeled assets, machinery and IT equipment to warehouse racking, mezzanine floors and office furniture but to name a few. A broker will have access to lenders who provide funding for standard and non standard assets.
5. Packaging- a broker will be able to package and present your business in a way that banks and lenders expect to see it. A full proposal highlighting the background of the business, an overview of the accounts and reasons to why then lender should lend on the assets will be enclosed. Many Asset Finance proposals are turned down because they are packaged and presented in the wrong way, and even presented to the wrong lending organisation.
6. Preferential rates - due to the volumes of business a broker will submit to lenders a broker will normally acquire preferential rates.
8. Credit rating- presenting your requirements to the wrong lenders will severely damage your credit rating due to the searches being made against you. A broker will know which lender will lend on which assets and minimise your searches
7. Finally, companies do not have the time available to research and present financial proposals.
Saturday, 7 March 2009
Which finance facility is best for us?
What method of finance shall I use?
When businesses calculate the cost of different sources of finance used, a logical relationship should emerge between the cost of the different sources of finance and the risks involved. This article discusses the implications and variations to determine the correct finance facility upon purchasing assets.
This method of determining ones options of finance is akin to a balance sheet whereby it is a snap shot in time of a company's overall worth and will vary given many factors.
Disclaimer
The calculations below are for indicative purposes only. Current tax rates and capital allowance rates vary and should not be used to alone to determine investment decisions.
Background
XYZ Plc, a coach operator have traded for 125 years. The company are purchasing a new coach to the value of £160,000; before the Finance Director makes a decision on the investment method the company may wish to calculate the NPV (Net Present Value)
(A net present value (NPV) includes all cash flows including initial cash flows such as the cost of purchasing an asset, whereas a present value does not.-we will endeavour to discuss and post full calculations in another article including WACC (weighted average cost of capital and the implications)).
Requirement
Factors that will influence the investment decision for XYZ plc
1. Asset cost (exc VAT): £160,000.00
2. Tax rate: 30% (now 28%-see Fig 1)
3. Capital allowance rate: 25%
4. Months to year end: 6 remaining
5.
6. Depreciation rate: 6.67% per annum
7. Asset kept for: 180 months
A synopsis of the net present cost, (please see explanation above) after tax over 180 months.
Most beneficial Consideration
Description Net Present Value
Hire Purchase 10 yrs 118102.65
Hire purchase 7 yrs 119706.41
Operating Lease 7 yrs 124458.72
Finance Lease 7 yrs 125634.50
Operating Lease 5 yrs 129528.88
The option with the lowest NPV should be considered the most economical, in this case XYZ plc should consider a Hire Purchase facility over a 10 year period, although many other factors will influence this decision.
*The discount rate is 5.71%
Compounding is the way to determine the future value of a sum of money invested now, for e.g. in a bank account, where interest is left in the account after it has been paid. Since interest received is left in the account, interest is earned on interest in future years; the future value depends on the rate of interest paid, the initial sum invested and the number of years the sum is invested for.
Discounting is the opposite of compounding, compounding takes us forward discounting takes up backwards from the future value of a cash flow to its present value.
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