A common question raised by School Business Managers is “How do we check our leasing contracts are ok?”
Here are some of our guidelines for schools leasing equipment.
Ensure that the Operating Lease you are signing is a true operating lease and compliant with funding guidelines.
Ensure that your funder is working to current guidelines and that any residual value is a true reflection of the future value of the equipment.
The length of the Lease Contract should not be longer than the working life of the equipment you are funding. In the bad old days (20 years ago!) we would come across panicking head teachers asking us for help because they had signed a 3-year lease (often a telecoms package) with a 7-year maintenance contract, or a seven-year lease on computers that had a classroom life of 3 years. Thankfully those days are over and funding guidelines are there to protect schools from skullduggery.
What type of funding options are there for your school?
Your project may involve different assets from different suppliers. You can tailor a lease contract to fit in with your budgets and administration. For example, you can sign off one lease with supplier A and 6 months later sign off the second tranche with supplier B and have the lease contracts run co-terminously.
Pay Annual Invoices.
This is more cost-effective than monthly or quarterly payments. Independent schools can, of course, opt to pay termly.
Check up-front how much notice you have to give on an operating lease.
You will have various options, but it is better to plan well in advance and if notice is to be given there is nothing to stop you from giving notice early on in the contract.
This is not included in the lease contract, but schools have an obligation to ensure that equipment is maintained and kept in good repair.
If you would like to have a chat about your funding options or would like us to take a look at the small print on old contracts, you have signed we are happy to do this free of charge – just contact our experienced team of finance experts below