Should you buy or lease your mailroom equipment?

Buying equipment and other fixed assets outright doesn't always make sound financial sense. Put another way, would you pay your staff salaries 6 years upfront?

Buying equipment outright, while often cheaper in the long run, may not be best solution for you. For a start, it eats into valuable working capital or bank overdraft facilities, which you could probably use better to fund growth. It may make more sound financial sense to either lease purchase or rent goods by leasing.

Neopost Finance Limited is a wholly owned subsidiary of Neopost Limited established as a leasing company in 1989. We now have over 26,000 live leases giving a portfolio in excess of £93m (September 2008). Neopost Finance is a true in-house service, not a badged substitute. We control our offering centrally to ensure that we meet the needs of our clients, rather than simply imposing the terms of a third party upon them. This gives us the flexibility and control to ensure we deliver the service our customers expect from us.

Neopost Finance was formed for the exclusive use of Neopost customers offering lease options over various terms up to six years to suit our customer's individual requirements and assist in meeting their budgetary constraints.

Our all-in-one maintenance inclusive within the lease payments provides fixed prices and gives peace of mind for the duration of the lease in addition to being able to provide innovative individually designed financial solutions that are not available to our customers via other 3rd party financing alternatives.

Neopost Finance offers a variety of financial solutions tailored to meet the needs of the mailing industry, and is able to include other related equipment and services such as maintenance, training and consumables.

Leasing with Neopost Finance Limited will give you many operational and financial benefits, which make the whole leasing process simple and easy to manage, leaving you to concentrate on other areas of your business.

Neopost Finance understands that, in order to remain competitive, your company needs to have the most up-to-date mailroom equipment. You can optimise your investment in Europe's premier supplier of mailroom and document handling systems through our leasing facilities, whilst still maintaining control of your budgets.

At the end of the contract, you have the option to extend the agreement, or simply return the equipment and take out a new agreement to fund the latest mailroom solution from Neopost Limited.

Customer Service

Dealing with Neopost Finance and not a third party provider, queries can be directed to Neopost personnel who understand your circumstances and are aware of all eventualities. Our professional and helpful staff can offer you first rate customer service providing a seamless and integrated approach to the financing process.

Finance & Lease Association Approved

Neopost Finance is as a Full Member of the Finance & Lease Association (FLA), recognising us as standard bearers of professional competence and high ethical standards. The Finance & Leasing Association is the major UK industry body for the asset finance, consumer finance and motor finance sectors.

The FLA is the principal voice/source of industry information and self-regulator of the asset finance and consumer credit industries.

As a Full Member of the FLA, Neopost Finance strives to comply with an extremely rigorous and robust code of practice which is designed to create the highest possible standards of business procedures. Full members of the FLA, such as Neopost, lead the market in terms of professional conduct and ethics.

Peace of mind

Going beyond the requirements of Credit Act (Agreements) Regulations and the Consumer Credit Act, the FLA guidelines offers Neopost customers complete peace of mind. It provides a self-regulatory structure and a code of practice that encompasses everything from pricing of equipment and documentation, to payment periods and termination clauses. In addition, you have the right to use the FLA complaints and arbitration scheme should you ever need to.

Working with your business

Neopost Finance is committed to helping your business manage your documents and mailroom more effectively. Through our dedicated in-house financing facility we reinforce that commitment, providing a convenient and red-tape free financing stream. Our FLA membership ensures that we can not only help you gain the technology that you need, but also reflects our commitment to provide you with a level of service and professional conduct that you deserve.

Leasing

You can lease any Neopost products including our mailroom furniture range. With leasing, the goods remain the property of the leasing company and never belong to you. At the end of the term you can often continue the arrangement or look to upgrade your equipment for the latest technology.

Finance leasing

Finance leasing is the cheapest form of leasing. A contract is made for a primary period, which depends on the expected useful life of the asset. You have unrestricted use of it and are responsible for maintaining and insuring it. During this time, the leasing company expects to recover the full capital cost of the asset. At the end of the term you can often continue the arrangement or look to upgrade your equipment for the latest technology.

Upgrades

Leasing equipment gives you flexibility. This is especially useful if the equipment leased is subject to quick technological change: you are not lumbered with out-of-date machinery and can regularly upgrade to a newer model. It is also suitable and available for all types of business from sole traders to multi-nationals companies.

Financial flexibility

Neopost Finance can offer you a lease or purchase plan from any period to suit you, from one year to six years**, and pay quarterly or annually. It makes budgeting simpler because you know your payment schedule. The other advantage is that repayments on all equipment you lease are fully allowable against tax.

Which is best?

Buying equipment outright is usually the cheapest solution, but if you take into account the total cost of ownership, it can make sense to lease. As well as releasing capital for other uses, leasing or lease purchase make it easier to forecast cash flow. This is especially so with agreements which include maintenance and repairs, since payments are fixed at the outset and are not subject to an annual increase. The choice of finance depends largely upon the type of equipment you want, the availability of cash now and in the future. Much also depends upon the interest rates available. The final factor is your own tax situation, as each method may have different implications for you. Check with your accountant.

^{** subject to formal credit approval.}