IT REPLACEMENT PROGRAM

IT REPLACEMENT PROGRAM
PRODUCTS MAIN RENTAL SCHEME
So your business is ready for new equipment.  Perhaps it is because:
  • Your organization has grown or its needs are changing.
  • Your current equipment / systems are out of date.
  • You need a modern solution to provide your customers with the best service.

What will happen in two years when the demands made on your equipment and systems have grown or changed?  Be prepared with an “IT Replacement Program”.

Rent and Replace

Instead of buying products that will gradually become obsolete - you rent what you need now and you replace it when necessary.

This means you know that a decision made now will not bind you irrevocably to a system which no longer fits in four, three, even two years time – you can update.

UPGRADING

Computer technology changes every 18 months, forcing you to rebuild your system almost as often. It’s costly and time consuming. But starting today it’s no longer necessary. ISL’s unique ACCESS RENTAL option is infinitely flexible, allowing you to ride the technology curve without having to start from scratch every time you need to upgrade your equipment. In short, obsolescence becomes obsolete.

Replace out-of-date equipment with the IT Replacement Program.

Depending on the term of the rental contract, you may be able to replace a portion of your system.  After the first year of a two year contract you can exchange 43% of the products; after one and a half years, 74%.  Assuming that the new products are the same cost as the old, the exchange will renew the length of your contract for a further 24 months but the bottom line is your rental payment will stay the same.

IT Replacement Program is a rental whereby:

  • Payments are categorized as an operating expense and appear only on the statement of income and expenditure.
  • Cash outflow is minimised and predictable.
  • The rental does not need to be included in the Balance Sheet and so does not adversely affect gearing.
  • You can have the equipment you need now – and avoid major cash outlays.
  • We can arrange to buy back and rent your existing equipment, enabling you to include everything under one plan.

FOR EXAMPLE:

If you purchased R100,000 of equipment on a 2-year rental term, you can swop:

  • Within 3rd quarter:   26%   (R26,000 of that equipment for new)
  • Within 5th quarter:   50%   (R50,000 of that equipment for new)
  • Within 7th quarter:   74%   (R74,000 of that equipment for new)

The rentals will continue for a further 24 Month Term after the swap takes place

 

ANOTHER EXAMPLE:

If you purchased R100,000 of equipment on a 3-year rental term, you can swop:

  • Within 3rd quarter:   15%   (R15,000 of that equipment for new)
  • Within 5th quarter:   30%   (R30,000 of that equipment for new)
  • Within 7th quarter:   45%   (R45,000 of that equipment for new)
  • Within 9th quarter:   60%   (R60,000 of that equipment for new)
  • Within 11th quarter: 75%   (R75,000 of that equipment for new)

Depending on the term of your rental contract, the IT Replacement Program gives you the right to replace a portion of your system.  An approximate indication of this is, on a three-year contract, after one year you can exchange 30% of the products; after two years, 60%.  Assuming the new products are the same cost as the old, the exchange will renew the length of your contract for a further 36 months but the bottom line - your rental payment - will stay the same.

 

WHY ISL FINANCIAL SERVICES
BENEFIT FINANCE LEASE CASH PURCHASE  REFRESH PROGRAM
Off Balance Sheet NO NO YES
Cash flow predictability through fixed payments YES NO YES
Goods can be returned for exchange NO NO YES
Tax deductibility of rental NO NO YES
No major cash outlay YES NO YES
All equipment through a single quarterly payment NO NO YES
Cost center billing and total asset management provided on an individual asset basis NO NO YES
Financial advantages of rental in capital and account reporting terms including buyback of non-core assets NO NO YES
Right to exchange products during contract term without penalty NO NO YES