Vikfin’s rent-to-own equipment finance is perfectly suited for small to medium-sized growing businesses because it offers three major advantages. Firstly, the monthly payments are 100% tax deductible which means that you are able to reduce your taxable income and move into a more advantageous tax position. Secondly, you can benefit from Vikfin’s flexible contract terms where you can choose between 6 months and 36 months. Finally, rent-to-own helps to minimise the concern that you are not building equity in the machine. Effectively, you are renting your way to ownership which means that at the end of the contract term, the machine becomes yours to sell or continue using within your business.
Rent-to-Own versus Equipment/Plant Hire
There is a common misconception that rent to own is similar to typical equipment rental. In fact, they differ greatly. While both have their pros and cons, it is important to understand the differences so you can make an informed decision about which option is going to be right for you and your circumstances. Let us start by looking at rent-to-own.
Rent-to-Own
This is an interesting alternative to traditional equipment hire because it allows you to build your credit profile while at the same time working towards ownership of an asset. Rent-to-own provides the same flexibility of equipment hire with the added benefit of being able to source assets from both dealers and the private sale market.
At the termination of Vikfin’s rent-to-own agreement, you will have built strength into your credit profile opening up opportunities for further business growth and equipment upgrades in the future. Vikfin is in the business of building long term relationships with its clients and assisting them in their growth plans.
Equipment Hire
This is a convenient option if you require equipment for a short period of time. With a traditional equipment hire agreement often registration and maintenance costs are included in the hire payment. However, the payment is generally higher than a rent to own agreement and you are not working towards ownership of the asset. At the end of the agreement, you return the equipment to the owner.
So, in summary…
Rent to Own (Vikfin)
Strengthen your credit profile while working towards equipment ownership. Rent-to-own is the most flexible equipment funding option with the ability to source stock from both dealers and private sellers throughout South Africa.
Traditional Equipment Finance (Bank)
In the past traditional equipment finance was the only option available. Traditional equipment finance is a cost-effective way to fund new equipment for your business. However, traditional banks tend to avoid financing used equipment because they do not understand it. Vikfin, on the other hand, has a team that has an intimate understanding of heavy equipment and heavy equipment finance.
Equipment Hire
Great for a short term requirement, but a more expensive option if you require equipment long term. This tends to be a more limiting option as only a small selection of equipment is typically available on hire at any given time.
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