IMAGINiT Technologies presents IMAGINiT Technologies Purchase Agreement
IMAGINiT Technologies presents IMAGINiT Technologies Purchase Agreement
has presented a purchase agreement that allows implementing new computer systems, with minimum impact on the business cash flow and maximum impact on tax position.
Why use cash?
Of all investments, management systems should have long lasting value. Why spend cash on investments that provide continuing benefits to the business for more than a decade? These can be purchased utilising finance, leaving work capital available for good ideas or emergencies.
Why the banks cannot help?
Banks and finance companies will normally finance only recoverable assets (hardware) because their banking charter restricts the financing of non-recoverable assets. If the credit risk is good, they may include some software up to a limited value.
Why is it tax effective?
Most of the purchase can be written off immediately or quickly, utilising legal business deductions and depreciation concessions. Annual Subscription costs, plus all the other ancillary costs, can be expensed in the current tax year, which greatly reduces the net cost of funding the purchase.
What is the benefit?
The IMAGINiT Technology Purchase Agreement allows one to legally finance every single component of the purchase including hardware, software, cabling, implementation, training, service contracts and consultancy.
All these can be brought together into one finance agreement and repayments spread over five years. The Technology Purchase Agreement allows taking full advantage of the tax benefits, without the need to spend the money first. These taxation benefits greatly offset the costs of financing, enabling the purchase to be cash flow positive.
Depending on the tax deductible items, the result maybe a self funding situation, where no money leaves the business for up to two years of the agreement.
Benefits of financing with the IMAGINiT Technologies Purchase Agreement:
- Financing has the same benefits as paying cash but without the full upfront payment
- Conserves working capital allowing for good ideas to grow the business
- No need to use secured overdraft facilities
- Preserves cash reserves
- No real estate security required
- Fixed repayments, over a fixed term, allow low interest rates to be locked in
- Maximises tax deductions, by claiming depreciation on hardware and software, whilst expensing Training, Installation and Service cost, plus 1st year Maintenance Agreements
- Provides a tailored financial solution to suit business requirements
- GST can be financed over the full term and fully claimed back in the next BAS statement (assuming accrual based accounting)
- Allows the software licence and 'contracts of labour' to be legally financed
- Tax benefits equate to a saving of between 10% to 30% over traditional leasing
4-Aug-2008
