FREQUENTLY ASKED QUESTIONS

What is an operating lease?

  • An operating lease is whereby the lessor (InnoVent) transfers only the right to use the equipment to the lessee (You); at the end of the period, the lessee returns the equipment to the lessor.
  • Therefore, the lessee does not assume the risk of ownership.
  • Furthermore, the lease expense/rental is treated as an operating cost in the income statement and the asset does not have to be accounted for in the balance sheet i.e. Off - Balance Sheet Financing.

Why rent and not buy?

By renting, you get the following benefits:
  • Low interest rates.
  • Protection from technology obsolescence.
  • Hassle free equipment disposal.
  • Off balance sheet financing.
  • Saving of cash which can be redirected towards return yielding projects/assets.

Why must I come to InnoVent when I can use my own cash or get financing from the bank directly?

  • The rates we offer are much lower than bank rates or your internal cost of funding.
  • Furthermore, by using our services we manage the assets for you, take care of asset disposal and offer flexible equipment upgrading options with no book losses etc.

Do you as InnoVent grant the financing facility?

  • We source facilities with various banks and then invest residual in the funding reducing your overall effective rate.

Who owns the asset?

  • InnoVent does. InnoVent finances the equipment and rents it out to you for a fixed period of time. InnoVent finances the assets on a residual model which means that you never pay for the full cost of the asset.

How does it actually work?

  • Step 1 You identify equipment and agree on cash prices with a suppliers.
  • Step 2 Supplier of equipment invoices InnoVent for full cash price including maintenance/warranty.
  • Step 3 InnoVent prepares rental contract based on invoice details and agreed upon finance rate.
  • Step 4 You sign off rental contract.
  • Step 5 InnoVent pays supplier full cash price upfront.
  • Step 6 You pay InnoVent rental amounts on a periodic basis for the duration of the rental period.
  • Step 7 Supplier maintains equipment throughout rental period.
     

Is the rental off balance sheet?

  • Yes it is in terms of IFRS.

Do you dictate what equipment type or brand I should use?

  • Not at all. You choose the brand spec, technology and supplier you prefer – InnoVent will finance whatever equipment you want.
  • We simply give an effective funding structure for your preferences.

What happens to the asset when the contract expires?

  • You can return the asset to InnoVent with no further obligations; carry on renting the asset at a reduced rate, purchase the asset at a market related price or rent on a casual month to month basis.

How will I know that the equipment is coming to end of term?

  • InnoVent's dedicated End-of-Term team will engage with you months before the contract is due to expire, allowing you enough time to decide if you want to return the assets, extend the contract or negotiate a solution that combines the two.
  • You will also have a dedicated relationship manager who will be involved with you throughout.
     

Who collects the equipment at the end of term?

  • Should you choose to return the equipment, InnoVent's dedicated End-of-Term and Logistics teams arrange for the collection and return of the equipment to our warehouse.
  • We do not outsource our logistics and warehouse function to a third party thereby ensuring minimal risk of damaging equipment during return.
  • Furthermore, there are no nasty damages bills or forced extensions.

Can I take ownership of the equipment after the rental period?

  • Yes. You can take ownership by paying the market value of the equipment. However, this is not recommended as the asset is probably out of warranty and obsolete by the time the contract expires.

How can InnoVent offer rates below bank rates?

  • We do this by subsidising the cost of the assets through a non-recourse residual investment.
  • Non-recourse to you means you are not responsible for paying the residual at the  end of the contract.
  • InnoVent carries 100% of the residual risk and recovers the initial residual investment at the end of the contract when it remarkets the assets to an established secondary market via their remarketing division, Qrent.

What kind of rental periods does InnoVent offer?

  • This depends on your requirements and expected useful life of the assets being financed. We can finance for periods between 24 to 60 months.
  • Shorter-term leases/rentals may also be considered upon request.

Who is responsible for insurance and maintenance?

  • In addition to equipment rental, InnoVent offers clients comprehensive and competitive insurance products to cover the equipment they're renting.
  • However, you can use your own insurance should you choose to.
  • The Supplier of the equipment chosen by you is responsible for maintaining the equipment.
  • Warranty costs can be included in the financed transaction i.e. you pay a rental amount which includes equipment rental plus warranty cover.

Can InnoVent provide the financing for the warranty portion of the hardware/equipment?

  • Yes, InnoVent will be able to finance this intangible portion with the hardware portion.

Will I still enjoy the discounts I receive from my suppliers if I lease/rent through InnoVent?

  • Certainly, by leasing through InnoVent you as the client get to control and negotiate two key elements. The cash cost of the equipment as well as the financing structure - when these two are negotiated separately the best value for money is given, when combined together, the most cost effective solution is achieved.

Will I have to change my current Suppliers?

  • No, InnoVent is vendor/supplier independent. You can choose any suppliers you wish and InnoVent will provide the funding structure independently.
  • InnoVent does not source or supply the equipment on your behalf – that is entirely in your control.

Does InnoVent put a mark up on the purchase price of the equipment?

  • On the contrary, InnoVent actually subsidises the cost of the equipment via a non-recourse residual investment. You will control the pricing of the goods as well as source the Suppliers independently.
  • InnoVent will then finance the equipment based on the best price you can get from your suppliers. Because of this separation between financing and supply, it will be self-evident that InnoVent subsidises the cost of the equipment for you.

Will the Service Level Agreements (SLAs) I have in place with my suppliers be affected if I lease/rent through InnoVent?

  • No, supplier relationships that have been established overtime with SLAs are not disrupted as InnoVent will work with any of your chosen suppliers.
     

Are the rentals payable to InnoVent by me tax deductible?

  • Yes, 100% of the rentals payable to InnoVent by you are 100% tax deductible.
     

What BEE procurement points will I receive for renting through InnoVent?

  • Because InnoVent is a AAA+ Level 1 Contributor company, you will receive R1.69c BEE procurement points for every R1.00 spent with us.

So what makes you different from other similar companies?

  • Our pricing is very competitive being below bank rates.
  • We subsidise your costs by taking a non-recourse residual investment in the equipment.
  • We have a 100% client retention record.
  • We have a cradle to grave; holistic approach to asset rental and management.
  • We have a winning End-of-Term process which is not out sourced to third parties.
  • We are transparent and ethical in the way we work.
  • We are flexible rental offerings to suit different needs.
  • We are vendor and supplier independent.
  • We have a quick turn-around to all business related issues, enquiries and queries.
  • We are professional and passionate about our company and business.