Lease Underwriting Limited - Financial Solutions for Business

LUL’s approach to equipment leasing and asset finance is to engineer a financial solution to suit a client’s cashflow, accounting, taxation and legal requirements, taking into account capital markets, stamp duty and other relevant considerations. For example, clients may wish to reduce balance sheet footings, match the finance commitment to the project life, achieve operating lease/off balance sheet status (AASB 1008/AA17) or generate franking credits.

LUL may fund or organize finance for a client with the aim of providing a tailored solution to suit the particular requirements of the client, the peculiarities of the asset or the limitations of the capital markets. LUL understands equipment finance and the pitfalls to be avoided.

Rental is a cost effective equipment finance facility that, by nature, integrates finance with the acquisition of equipment and allows a better matching of equipment use and revenue generation. The desire to minimise equipment obsolescence, lower the total cost of ownership and streamline the asset disposal process are compelling factors in the attractiveness of operating lease and rental facilities to our clients.

Lease term extensions beyond the initial term with scaled discounted future rentals applying to various extension terms
The ability to changeover or upgrade equipment during the term of the lease with adjustments to rentals and/or terms to reflect such upgrades

Flexible end of lease options whereby clients have the following options at the end of the primary lease term:

Return the equipment at the end of the initial rental term, or
Continue to rent the equipment at a discount for a further period if required, or
Offer to purchase the equipment at fair market value

Acceptance of ‘like for like’ equipment returns with different serial numbers
Fair ‘wear and tear’ provisions which acknowledge that the equipment will not be returned ‘as new’
Flexible insurance provisions

LUL understands that the financing and use of property generates different challenges due to dealing with real property (land) and fixtures to land. By nature, most real property financings are for longer terms and costs such as conveyance, lease and other duties and charges need to be carefully treated. LUL also understands that property, unlike equipment, generally increases in value over time and needs to be assessed with different criteria.

Property holdings are generally not seen as a core element of an enterprise, however, the cost of not controlling property is generally in excess of capital hurdle rates!

As equipment finance is a powerful tool in the sales process, equipment vendors utilise LUL to support their sales network and valued customer base.

It is important that such programs are established to generate added flexibility and cost effectiveness for the client end–user and as an important sales aid and differentiator for the vendor.

The majority of financial institutions are not comfortable with equipment risk and will generally not accept unguaranteed residual values. Financiers generally wish to receive their full return in the form of fully guaranteed repayments from their clients.

LUL is comfortable with equipment risk, prudentially spreading the risk over a wide spectrum of credits, equipment and industry categories. LUL will underwrite the residual value for other equipment financiers, allowing them to offer rental to their clientele.

LUL can assist clients with the tracking and management of assets for cost centre reporting and asset control purposes.

LUL can organise for equipment to be bar–coded and monitored based on client movement advices or by conducting an asset audit.

LUL is familiar with the working and pricing of leasing, finance and capital markets and can assist clients:

Advise clients on refinancing their assets or existing funding
Complete actuarial assessments and validate payment profiles and recalculations