TruServices

Finance

Machine Tools/ Power Tools Laser Technology/ Electronics Medical Technology

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Contents Introduction to TRUMPF Financial Services 

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What’s right for me? 

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Finance Options  

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All information correct at time of going to press. Please contact TRUMPF for latest details and any updates to services provided.

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Dedicated finance solutions for the manufacturing industry

Introduction to TRUMPF Financial Services In a complex world sound financial support can make a difference to your business planning – especially if you are thinking of investing in equipment. To provide all the help, advice and assistance you need, TRUMPF offers a range of flexible financial products to give you predictable costs and manageable risks – over the entire life cycle of your equipment. At TRUMPF you will be introduced to a financial specialist offering all-inclusive, competitive financing solutions for new and used machines, tooling and software. Our mission is to work with you to create a tailor made package that’s right for your business and in doing so, we will seek to develop a payment plan that will offer a competitive finance package making it affordable to purchase first class TRUMPF equipment.

Finance available for:

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Machine Tools

Power Tools

Laser Technology

Pre-owned machines

Tooling

Software

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What’s right for me?

That’s a good question and one to which the answer will depend on a wide variety of factors. To help you choose the funding method that’s best for your business, our finance specialist will discuss your requirements and tailor both the product and payments to suit your needs. In every case, our aim is to provide a range of finance options to help retain your working capital and match your cash flow in the most tax efficient way. To start the process, we have created this quick reference chart and diagram opposite to help determine which products to consider.

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Cash or Finance? Once again, the answer here will depend upon a number of

From a tax perspective, Hire Purchase allows you to claim tax

factors and will vary from business to business. Here are some

relief in the form of capital allowances. VAT is fully

key points to consider:

reclaimable at the start of a Hire Purchase agreement – in the

If you use cash or even your overdraft you may be tying up a

same way as cash. Leaving the cost of the equipment in a

large amount of working capital, which could leave you

deposit account not only provides a useful buffer, but the

exposed if your business volumes decrease or if you want to

interest received partly offsets the interest on a finance

expand your business to meet increased demand.

agreement.

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Finance options

Hire Purchase “For companies seeking to own the equipment outright, Hire Purchase provides a simple choice with a number of straight forward options.” A Hire Purchase agreement provides all the benefits of ownership without the capital outlay. After an initial deposit you pay regular fixed instalments of capital and interest. Payments may be tailored to match your income stream, enabling you to optimise your cash flow. The equipment is owned by you all the payments have been made. Your benefits are: Shows the equipment as an asset on your balance sheet Accurate budgeting VAT fully reclaimable Tax writing down allowances available Interest charges allowable against tax

Lease Purchase Lease purchase is a fixed rate Hire Purchase agreement with lower than usual payments as a result of a ‘balloon payment’, a final lump sum, which is made at the end of the contract. This means a percentage of the capital borrowed remains unpaid until the end of the agreement. We can set the balloon payment at the end of the agreement below the estimated future trade-in value in order to help you with a deposit on your next machine. A Hire Purchase agreement provides all the benefits of ownership without the capital outlay. After an initial deposit you pay regular fixed instalments of capital and interest. Payments may be tailored to match your income stream, enabling you to optimise your cash flow. The equipment is owned by you all the payments have been made. Your benefits are: Shows the equipment as an asset on your balance sheet Low fixed payments Accurate budgeting VAT fully reclaimable Tax writing down allowances available Interest charges allowable against tax

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Finance Lease “A Finance Lease means your equipment is hired to you for a fixed period of time without the option of ownership. At the end of the agreement the equipment can be sold on with the proceeds being repaid to you.” There is little difference in the accounting and tax treatment between a Finance Lease and Hire Purchase. With a Finance Lease as with Hire Purchase, the finance element of the monthly rentals are charged against taxable profits. Tax relief on the capital element of the rentals is given by allowing the deduction of the accounting depreciation charge on the leased asset. There can also be a low initial outlay and the VAT, which is collected with the rentals, is spread over the period of the agreement. At the end of the agreed lease you can continue to use the equipment for a nominal annual amount. When you no longer require the equipment, the vast majority of the net sale proceeds are returned to you as a rebate of rentals. Your benefits are: Shows the equipment as an asset on your balance sheet Low capital outlay Payments fixed at the start of the agreement Accurate budgeting VAT collected on each rental rather than at the start of the agreement Option to extend the lease for a small annual amount You get the majority of the sales proceeds on sale of the equipment Contract maintenance can be added to the monthly rentals

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Operating Lease “With lower monthly payments and no disposal worries at the end of the contract, an Operating Lease can be an attractive option for many companies.” With an Operating Lease your equipment is hired to you for a fixed period and an agreed maximum hourly usage. The rental cost is calculated on the purchase price of the equipment, less its estimated resale value at the end of the contract, plus finance charges. Consequently, you benefit from lower monthly payments as a result of TRUMPF taking into account the expected future value of the equipment. In effect, you are paying for the expected depreciation of the equipment plus interest. This means you do not have to take any risk in the resale value of the equipment or become involved in trying to sell it. This all handled by us. At the end of the contract you simply return the equipment to us and providing it meets the return conditions and hourly usage agreed at the outset, there is nothing more to pay. From an accounting point-of-view the equipment does not appear as an asset in your accounts. The rentals are shown as an obligation and are taken against taxable profits. Your benefits are: Low initial outlay Fixed repayments Lower than usual monthly repayments Rentals are allowable against taxable profits VAT on rentals is claimable No risk or administration at the end of the agreement providing the equipment meets return and usage conditions Off balance sheet funding

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TRUMPF Limited · Unit A, Airport Executive Park · President Way · Luton · Bedfordshire · LU2 9NL Telephone +44 (0)844 820188 · Fax +44 (0)1582 399220 Email [email protected] · Website www.uk.trumpf.com