|
|
| Why Would Local Government Use An Operating Lease?
|
|
|
 |
Why would Local Government use an operating lease?
ISIS LG FINANCE proposes that Local Government consider adopting operating lease strategies in the context of the following:
Capital Budget restrictions
In
situations where Capital Budget restrictions are applicable and where
you LGA has an immediate need for plant and equipment an Operating
Lease enables you to have access to the use of the asset without having
to find the capital cost upfront.
Attractive Cost of Capital
ISIS
LG FINANCE is able to provide Operating Leases at an effective cost of
capital which is normally well below the cost of bank loans because
ISIS LG FINANCE takes a residual risk investment in the equipment it
finances, something the banks don’t do.
Free up funds for more profitable investments
Instead
of paying cash from the municipal fund to finance asset acquisitions,
the astute financial manager could take out an operating lease and
deploy those funds elsewhere for a better return.
Cash flow
Where
you are experiencing difficulty in managing cash flow shortfalls you
can reduce the initial outlay and establish agreed payments to suit
your requirements.
Tailored Rental Structures
Rental
payments can be structured to meet the needs of the LGA. These
structures can reflect seasonal income streams or specific project cash
flows.
Total Package Solutions
ISIS LG
FINANCE can fund the total cost of technology and equipment acquisition
and installation, including the cost of hardware, software, licensing,
management, training and installation costs.
Technology or Equipment Obsolescence “Hedge”
If
you want to avoid getting caught with obsolescent technology and
equipment or having to use it long after its useful life cycle has
expired, then operating leases gives you these choices:
- End of term return
- Seamless midterm or end of term upgrades to new technology
- Replacing unsuitable technology and equipment at anytime
Reduced Tendering and Asset Disposal Costs
Under
the WALGA/ISIS LG FINANCE arrangement, you don’t have to go to tender
for an Operating Lease. This avoids the unnecessary inconvenience, time
and cost associated with an individual LGA having to go tender to
access funding for an asset acquisition.
Specialists from our
ISIS LG FINANCE Team will work with you during and “end of term” to
ensure that you have the most cost effective, easy and seamless options
to migrate towards your new asset requirements.
|
|
|
|