Packo Finance Options
Rental / Operating Lease
A Rental / Operating lease is an agreement to rent equipment for use in a business for a fixed period (up to 5 years). Upon maturity, flexible end of term options allow the customer to return the Packo vat to GE Commercial Finance. Purchase outright or continue to rent the equipment or upgrade to a larger capacity vat to meet growing demands.
Benefits to Packo Customers
Rental/ Lease payments are treated as an operating expense (ie. off balance sheet) and are 100% tax deductible.
Bank lending ratio's and covenants are preserved as equipment is off balance sheet, this keeps bank credit lines open for other purposes.
Upgrade obsolete equipment easily, or even during the term.
Obtain assets in situations where no budget exists for capital expenditure.
Flexible terms of contract from 1-5 years. This could coincide with the cycle times to increase herd size and therefore upgrade vat size.
Rate Chart
The Rate Chart provides an example of the bottom line effects on the balance sheet. The rates below are applied per thousand dollars invoiced (excl. GST) over a particular term.
| Amount ex. GST | 12 mths |
24 mths | 36 mths | 48 mths | 60 mths |
|---|---|---|---|---|---|
$5,000 - $10,000 |
$ 83.14 | $ 44.68 | $ 31.94 | $ 25.64 | $ 21.90 |
$10,001 - $20,000 |
$ 82.70 | $ 44.22 | $ 31.46 | $ 25.14 | $ 21.38 |
$20,001 - $30,000 |
$ 82.70 | $ 43.84 | $ 31.06 | $ 24.73 | $ 20.96 |
$30,001 - $50,000 |
$ 82.35 | $ 43.67 | $ 30.89 | $ 24.55 | $ 20.77 |
$50,001 - $75,000 |
$ 82.19 | $ 42.93 | $ 31.11 | $ 23.75 | $ 19.95 |
$75,001 - $100,000 |
$ 81.42 | $ 42.86 | $ 30.04 | $ 23.67 | $ 19.87 |
$100,001 - $150,000 |
$ 81.39 | $ 42.82 | $ 30.01 | $ 23.64 | $ 19.84 |
$150,001 - $250,000 |
$ 81.38 | $ 42.81 | $ 30.00 | $ 23.63 | $ 19.83 |
These are indicative rates only. The rate per thousand assumes monthly in advance repayments, excludes stamp duty and is subject to approval.
Calculation Example, lending $20,500.00
Invoice price = $20,500 (inc. GST), $18,636.36 excl. GST.
Term = 48 Months
Factor = $25.14
Repayment calculation = $20,500 / 1000 = 20.5 x $25.14 = monthly repayment of $515.37 inc GST.
Daily Rate = monthly repayment X 12 divided by 365 = $16.94 per day
Per Milking Rate = $16.94 per day divided by 2 = $8.47 per milking
Deferred Payment Finance
Deferred payment finance allows flexibility of receiving equipment upfront without having to make a payment for 6months. During the deferred payment period, relevant GST payments are made.
Various Options
Six months interest only followed by 42 rental payments, can be divided as follows:
- (Principle & Interest – P&I) for 48 month term OR 54 rental payments for 60 month term.
- No payments for 6 months and then 42 monthly rentals (48month term) OR 54 monthly rentals (60 month term).
- No payments for 6 months then 48 OR 60 monthly rentals (P&I), extending terms to 54 & 66 months as the case may be.
