ISIS Frequently Asked Questions

Q: We normally want to own the product/service, why should I lease?
A: The advantages of Operating Leases over outright ownership include:

Flexible end of term options
Off balance sheet funding
Manage or invest your working capital more effectively
Technology exchange programs

Q: Is ISIS LG FINANCE an independent financier or is it directly associated with asset sales such as hardware, software, equipment?
A: ISIS LG FINANCE is completely independent and does not sell or act as an agent of any hardware, software or equipment company.

Q: Our council has a debt free policy, isn’t this adding to our debt?
A: Debt is treated as a liability on the balance sheet, whereas an operating lease is an agreement to pay a rental to use an asset over an agreed term – this is an operating expense and it is not a balance sheet item. It doesn’t come into calculation when assessing a debt free policy.

Q: What is my end of term alternatives?
A: You have five end-of-term alternatives:

Extend the rental period.
Upgrade or replace with new equipment.
You can make an offer to purchase the equipment at fair market value.
Return the equipment with no further payments required.
Or any combination of the above that best suits your requirements.

Q: Which equipment supplier can we use?
A: You are free to use whichever supplier you choose as ISIS LG FINANCE is not a supplier or agent of hardware, software or equipment.

Q: What if I want to upgrade my equipment during the rental term?
A: That’s OK. We simply adjust the rentals to incorporate the cost of the new equipment. Or, to keep the payments the same, you can establish a new term.

Q: Can I add on equipment to my initial existing rental agreement during the rental term?
A: Yes you can – by executing our variation agreement. This allows you to either:

Increase the rentals without extending the term; or
Extend the rental term to maintain a similar quarterly rental as per your existing rental agreement.

Q: Can I cancel the arrangement before the end of the term?
A: If you cancel the arrangement and return the equipment before the end of the rental term, you must still pay for the balance owing. A more cost effective alternative is to upgrade to new equipment and execute a new rental agreement.

Q: What is the effective interest rate?
A: As the arrangement is not a loan, there is no interest rate. You are paying rental for the use of the equipment over a pre-determined period. You are not repaying a loan and because ISIS LG FINANCE take a calculated risk associated with the residual value of the asset the amount being financed is less than what the bank would be doing as it has to recover 100% of the asset cost plus borrowing costs.
Therefore it is not a simple comparison of interest rates as the amounts being funded will vary.

Q: Does ISIS LG FINANCE any other equipment apart from office technology?
A: Yes. We’ve helped many businesses and industries acquire various major assets. From yellow goods, office furniture, printing equipment and demountable buildings. Click here to view some examples .

Q: Are my payments tax deductible?
A: Yes, but only if you are not tax exempt. (Most of Local Government activities are tax exempt, therefore this benefit is not applicable so please check with your accountant or financial advisor).

Q: What happens if I damage the equipment?
A: Most equipment is covered by the manufacturer’s warranty (check with your supplier). Beyond that, you are responsible for repairs and maintenance and to keep the equipment in good working order and insured at all times.

Q: What is fair market value?
A: Fair market value is the estimated amount for which an asset should exchange between a willing buyer and a willing seller in an arm’s length transaction after reasonable time and proper marketing.

Q: Why would we use AMPS when we have our own Asset management System?
A: AMPS is an asset management tool that can track assets and individual operating lease rental transaction.

Q: What is a Master Rental Agreement?
A: Essentially a Master Rental Agreement is one covering agreement that includes the relevant terms and conditions that each party will adhere to for a specified term, along with specimen signatures of those who are authorised to sign subsequent schedules.
Each time you wish to add a piece of equipment under the Master Rental Agreement, we act as central liaison between supplier and you to ensure smooth delivery.
The new Rental Agreement is added to your Master Rental Agreement.