Our schools supply service is second to none.
We are experts in education supply. Quality instruments, tailor made outfits for classrooms and an in depth understanding of school finance regulatory requirements.
Through our outreach programmes we support our education partners. Call Alastair Hanson to learn more. 01484 848060
Are you a teacher rather than an accountant? Is understanding the benefits of an ‘operating lease’ not top of your agenda this week?
We are here to help. Let us work with your school business manager, take care of the bursar and provide you with the instruments you need right now to deliver outstanding lessons to your pupils.
Access full class sets of instruments this term and stay within budget.
Teach using new instruments that work!
Better than using your budget to fix up those old bangers from the store cupboard.
What is an Operating Lease
The Institute of School Business Leadership (Previously the NASBM) states:
An Operating Lease is the only type of lease agreement that state funded schools (local authority or Academy) can enter into without prior approval.
No other form of finance (such as hire purchase) may be entered into by a school as this is a prohibited form of borrowing.
What does it mean for your school?
- You can access equipment to which your budget may otherwise not stretch.
- You pay for usage rather than ownership.
- Typically, rentals work out to be interest free.
- Contracts are usually for a 24 or 36 month term. We can also quote the costs of a 48 or 60 month lease.
- You have the right to retain or return the equipment at the end of the contract.
How does it work?
Over the agreed period of the operating lease, you will be able to make full use of the instruments (assets). The payment is made for the use of the items, not buying the items.
The difference between a lease and hire purchase are subtle, but in simple terms a hire purchase puts the school in debt which is not allowed, whereas an operating lease is paying for use.
The technical stuff:
An operating lease is typically used where assets have a residual value, such as vehicles and machinery. The residual value of the asset is estimated when the lease is set out. The leasing company runs the risk that this value could increase or decrease over the period of the contract. However, the residual value is still set at the beginning of the contract.
The rental payments do not cover the entire cost of the asset or assets but are calculated based on the original purchase price and the forecast residual value. Other services such as maintenance of the assets, may also be included in the operating lease, depending on the exact terms laid out in the initial agreement.
At the end of the operating lease, the asset will be returned to the leasing company for it to either be re-hired or to sell it on to release the residual value of the asset. Due to the nature of an operating lease, it is currently considered as an off balance sheet arrangement.
There is administration surrounding the setting up of an Operating Lease. We are at hand to help you benefit from this accounting device with the minimum of fuss. We are fully Financial Conduct Authority authorised and together with our partners Arkle Finance have a comprehensive knowledge and vast experience in helping customers just like you.
What are the benefits of an Operating Lease?
- Get the best equipment you need for your school, no more sharing instruments because there isn’t enough cash this year!
- Work within your budgets with fixed payments.
- Claim back the VAT on items.
- For the school accounts Rentals are considered an expense item.
- Reduces the risk ownership.
Tell us more
To find out how we can help your school music department drop us a line or telephone Alastair Hanson on 01484 848060.
We will be pleased to help you.
How to get in touch with us
When contacting us please bear in mind that we are a busy factory workshop, not just a showroom and warehouse, and often it's not possible to answer phones or emails right away.
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Hanson Musical Instruments