The Myths of Leasing
There’s more than a little misconception when it comes to school leasing, which is why in this short guide we’ve highlighted and answered some of the common myths of leasing.
1
You may think not much leasing is done in education.
False. In 2017 over £1 billion was written in Education leasing across the UK. That pretty much says everything that’s needed to be said about this myth!
2
You may think Schools DON’T lease.
False. From the top universities to further education, secondary schools, primary schools and nurseries…..…they all have benefited from leasing. We can tell because we have provided agreements for over 5000 of them.
3
You may think you MUST return the equipment at the end.
False. When a lease Agreement is terminated, there are a number of options available to you. One of those is to return the goods, another is to upgrade the equipment to the latest version or you may be able to make an additional payment to obtain ‘indefinite use’ of the goods. Invariably the applicable option lends itself to the equipment type. For example, it makes sense to upgrade IT equipment every few years, but upgrading your playground every few years wouldn’t.
4
School think they aren’t allowed to lease equipment.
False. Schools are allowed to lease, however they’re not allowed to take a form of ‘credit’. This is why the Department for Education & Funding (DfE) recommends schools use Operating Leases, as the school isn’t borrowing any form of credit because the lease provider owns the equipment and rents it back to the school. The school then pays the agreed rental fees for using the equipment.
5
Schools think the payments have to stay the same once agreed.
False. If you choose to work with a bank or a lease broker, this will most likely be the case. But, if you work with an independent lease provider, such as Funding 4 Education, they will be able to provide more flexibility with the payment profiles to reflect your budget, so under-spends and overspends can easily be accommodated. Payments can also be stepped so if you have a shortfall in this year’s budget the payments can be lower in the first year and then increase (“step up”) as next year’s budget becomes available.
Still have concerns about leasing?
Get in touch with our specialist care team to get your questions answered!
or call us on 01625 415 400