Rental Solutions
Voltex Lighting, with the full support of Eskom, has sought innovative ways to reduce
electricity demand by replacing inefficient lighting systems with new energy-efficient
lighting systems. Their solutions can be upgraded to the extent whereby entire buildings
can be managed to maximize energy efficiency.
Savings on the lighting load of between 25% – 49% have been achieved, for many
Voltex Lighting clients over the last three years.
In keeping with its drive to provide solutions where others see problems, Voltex Lighting
has also recognised that electricity has always been expensed as an operational cost
in the business. The investment in replacing old luminaires is essentially a capital
expense, and to that end many companies have not been keen to incur the costs.
However, the cost savings are marked, and to this end Voltex Lighting have introduced.
an Operating Rental scheme for qualifying customers.
The rental payment is sometimes
fully, and other times partially covered by the cost savings enjoyed by the company. The
rentals are a fully tax deductible Operating Expense, and Voltex Lighting have kept the annual increase in the rental payment to between 7.5% and 10% per annum; quite significant when faced with a call for a 53% increase in electricity tariffs on the back of
a already approved 14% mentioned in the press last month.
Voltex Lighting a highly experienced Esco, will where applicable still present projects
for Eskom DSM approval, but the introduction of the Voltex Lighting Rental Solution
now allows companies to immediately benefit in terms of the energy savings offered.
WHY RENT?
Benefits of Rental
• Get the technology now, pay later
• 100% tax deductible
• Operating expense
• No capital budget required
• Off balance sheet finance
• Payment plan to suit customer
• VAT paid monthly
• Upgrade technology 205
FAQ
1. WHY OPERATING RENTAL?
• Operating rental enables you to obtain cutting edge technology today and maintain the edge
through upgrades as technology changes.
• You have the added advantage of securing current pricing.
• The implementation of the lighting technology will ensure savings on your electricity bill
which can be offset against the rental payments.
• The annual increase in the rental agreement is agreed upon upfront and not subject to
unknown inflationary and infrastructure increases. (i.e. It is expected that the operating
expenditure in respect of electricity costs from Eskom will double over the next 5 years)
2. WHAT IS AN OPERATING RENTAL?
• An operating rental is, as its name suggests, a term payment plan, but classed as an
operating expense. This means no requirement for capital budget by the board of directors
in respect of the capital amount due for the equipment, if an operating budget is in place
for the operating expenses of the company.
• Thereafter, if a company has an existing expense of say R840 000 per annum for electricity,
they can redirect this expenditure to the rental of efficient lighting. The cost saving on the
lighting will offset the rental without the company incurring additional expenditure.
3. IS THE RENTAL TAX DEDUCTIBLE?
• As with any expense in a business, the monthly/quarterly rental is 100% deductible from
the company’s before tax income.
4. WHAT DOES ‘OFF-BALANCE SHEET’ MEAN?
• Given that a rental is an operating expense, the equipment which is the subject matter
of the agreement is not shown on the balance sheet of the company, either as an asset
or a liability. This means no asset tracking and the gearing of the balance sheet is not
affected.
5. WHAT ARE PAYMENT PLANS?
• Rentals are tailored to the customer and not the customer to the rental. This means that
with the effective use of payment plans, we can maximise operating budgets.
• For example, if a company has budget that must be utilised in a specific period, a lump
sum, fully tax deductible rental can be paid with reduced rental payments thereafter.
• Similarly, if sufficient budget is available, a reduced rental period can be applied.
6. VAT PAID MONTHLY?
• Because an operating rental is an expense to the company, VAT is raised as the rental
payment is raised and not added to the capital value.
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RENTAL SOLUTIONS
FAQ
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7. UPGRADE OF TECHNOLOGY?
• This is one of the most important features of an operating rental. Once the Master Rental
Agreement is in place, schedules are signed for the equipment supplied.
• This means that as technology improves, or if a phased approach to upgrading old technology
is required, transaction schedules to the master rental agreement are signed.
8. WHO QUALIFIES?
• Given the nature of the equipment supplied by Voltex Lighting, only undoubted customers
will be considered for the Rental Solution at this stage.
9. WHAT IS REQUIRED?
• A rental application giving the company’s details is required in terms of the Access to
Information Act before a rental transaction can be assessed.
• Any additional information required will be done on request, as, given the target market for
this product, most information required should be publicly available.
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