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Asset Finance for Schools 11th June 2009
Darrell Slevin Associate Director
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Structure of presentation
Sector Treasury – Who are we?
Current Regulations and Financing Options
Assets Leased by Schools / Current Position
Proposed Solution
Sector’s Lease Expiry Support
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Sector Treasury……Who Are We?
Highly experienced team
A leading Public Sector leasing advisor
Arranged leasing facilities in the last three financial years for over 150 clients for assets with a value in excess of £250m
Luton’s Appointed Advisor
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Current Regulatory Framework
The Schools Standards and Framework Act 1998
The Education Act 2002
The School Finance (England) Regulations 2006
Prudential Code
SSAP 21 / FRS 5
IAS 17 – April 2010
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OPTIONS
PurchasePurchase
GrantsGrants Internal LoanInternal Loan LeasingLeasing
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- Computer Hardware and Software
- Photocopiers and Printers
- Telephone Systems and Fax Machines
- Furniture and Lockers
- Laboratory and Workshop Equipment
- Catering Equipment
- Sports and Gymnasium Equipment
- Musical Instruments
- Coaches and Minibuses
- Security Systems
Assets Leased by Schools
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Background - IT/Equipment Leasing
Supplier introduced leases - Beware
On assets which depreciate fast and are difficult to return, a form of finance lease is likely to be the finance option utilised by suppliers. This is non-compliant (ultra vires).
Concerns
- Uncompetitive rates
- Agreements are usually finance leases
- Onerous documentation
- Finance linked to supply – forced refresh
- Termination and roll up leases “blend & extend”
- Equipment specific
Always look to break down Supply costs Finance costs Maintenance / Service costs
Operating Leases can be arranged for most assets
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Lease Roll-ups – Caution!
“Easy upgrades”
TechnologyRefresh
BNP Paribas, Canon, Capgemini, Dell, HP,
IBM, Ikon, Konica Minolta, Pitney Bowes, RM,
Sun Microsystems, Syscap & Xerox
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Proposed Solution: The Call-Off Facility
Competitive Rates
Save moneyWide Asset Coverage
Easy to arrangeStandard Terms
Minimise problemsSSAP21 Compliant
Real Operating Lease
Reputable Lessor
Reduce problemsReal Return Option
WEEE savingsReporting Mechanism
Reduces problemsSchools Deal Direct
Reduces LA involvement
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Sector’s Lease Expiry Support
Database of contracts
Early reminder of contract expiry to LA
Evaluation of options
Help negotiate lease extension terms
Third party sales to the School
Negotiate return condition charges