09 Feb Product Feature – Leasing
A young accountant fresh out of college is interviewed by the owner of a small business. “I need someone with an accounting degree,” says the man. “But mainly I’m looking for someone to do my worrying for me. I have lots of things to worry about, but I want someone else to worry about money matters.”
“OK,” says the accountant. “How much are you offering?”
“You can start at $75,000 a year,” says the owner.
“That’s a great salary!” says the young accountant. “How can a business like yours afford to pay so much?”
“That,” says the man, “is your first worry.”
Cash flow, working capital, creditors, debtors and taxes all part of the game we call business. However, the game can turn sour very quickly, the most common pitfall- cash flow. For many SME’s in the Truss and Frame industry, the ability to compete is reliant upon the ability to automate production. And therein lies the conundrum, plants need automation to grow but can’t afford to make the investment. Yes, a linear saw (or other form of automation/technology) will help your business grow but you are not ready or unable to invest in a capital expense. The presumed financial risks are holding you back and the banks will not take on the risk, preventing your ability to get the technology that is necessary for you to compete and grow.
Traditionally, there have been two options available-
- Take the risk- take on that higher interest loan, make the deal or do whatever is needed to fund the capital equipment.
- Forget the idea- you’re not in a situation now or the near future to invest in capital equipment. Keep slugging away doing what you’ve always been doing.
With Vekta, there is now have a third option:
In-house leasing on all of Vekta’s entire product range.
The Razer V5 Saw, Razer S5 Saw, PackFeeder, StakPro truss and frame stacking systems, Truss Transfers, Smart Roller Conveyors.
And as with all Vekta products, everything can be configured to suit your manufacturing processes. Right to left, left to right, waste conveyors, dust extraction, printing and the list goes on.
So how does it work?
During your agreed lease period, Vekta provides the equipment, all of your technical support, servicing and software upgrades for a flat monthly fee. If, at any point, either before or after the contract expires you decide that purchasing the equipment outright makes sense, the lease agreement includes an agreed upon formula for calculating what the purchase price will be at that point in time.
- There are no penalties or hidden figures.
- Your equipment isn’t locked in with a particular nail plate provider.
Want a slightly different arrangement? No problem! As a direct lease agreement with Vekta, we can negotiate with you directly to find the perfect arrangement!
The intention of this is to help companies, particularly small to medium size fabricators, invest in the technology they need to be competitive and to grow. By leasing directly, a customer that might not have the assets to purchase outright, can still get the equipment they need.
Another advantage, the lease payments will likely be considered an expense (tax deductible) where as a loan repayment isn’t (only the interest is tax deductible). As a result, a lease arrangement is likely to create a tax advantage over an outright purchase (independent financial advice needs to be sought).
Vekta leasing was originally created to help small companies automate and get the technology they need to grow and be competitive. Interestingly, we have found that a number of larger companies are seeing the advantages of being able to lease the equipment. One monthly figure that fits in nicely to the cash flow chart. To find out how leasing helped Kidd Truss read the article here