Albury Asset Rentals | About Us

Assignee

The person to whom an existing Lease is transferred.
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Assignment

The process of transferring an existing Lease or the document by which it is transferred.
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Base Rate

The interest rate which banks and finance houses use to calculate interest charges on floating rate or base rate-rate linked loans or agreements. Base rates fluctuate from period to period in line with general level of interest rates. Each customer will have a margin added to the applicable base rate which will vary depending on the transaction involved.
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Capital Allowances

The amount of depreciation allowed by the UK Inland Revenue to be offset against taxable income.
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Consumer Credit Act 1974

Legislation introduced for the protection of consumers who enter financial arrangements. The Act currently affords protection to partnerships up to 3 partners and sole traders as well as private individuals for any amount for non-business use and for business use where lease rentals (inclusive of VAT) are £25,000 or less or, for loans and HP, where the balance financed is £25,000 or less. The Act includes regulations for advertising, negotiations, quoting of rates and merchantable quality claims.
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Contract Hire

A lease agreement which normally also provides added value services, usually involving maintenance of the asset at predetermined minimum standards.
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Finance House Base Rate (FHBR)

The base rate published by the Finance and Leasing Association at the start of every month, calculated by taking an eight week moving average of three month LIBOR and rounding the result up to the nearest half of one per cent. FHBR is used as a base rate on variable agreements.
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Finance Lease

A lease that confers substantially all of the risks and rewards of ownership to the lessee. Under such leases, the rentals can be construed to be payment for the asset on deferred terms. Typically, the rentals will reimburse the lessor with the full cost of acquisition of the asset and provide him with additional consideration for the finance that he is providing to the lessee. (Note that the actual, legal ownership of a leased asset never passes to the lessee)
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Guarantor

A person who undertakes or gives a guarantee that a party to contract will perform its obligations.
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Hire Purchase

An asset finance agreement under which the customer obtains legal title to the equipment once all finance repayments have been made. An option to purchase fee may also be payable, typically at a nominal level. Although legal title passes at the end of the term, for tax purposes, the customer is regarded as the owner from the outset.
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Lessee

The customer who uses the leased equipment in return for payment of rentals.
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Lessor

The owner of the leased asset, provided for the use of the lessee.
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Libor: (London Inter-Bank Offered Rate)

Libor is the rate of interest most commonly used as a reference point in calculating floating rate interest payments. It is calculated by taking the average of the rates of interest which an agreed selection of major London Banks are charging for lending money to each other.

A LIBOR level can be obtained for each of the major lending periods available in the money market. i.e. one month, three months, six months and twelve months. LIBOR levels are available in either of the two main currencies lent and borrowed in London sterling and US Dollars.
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Operating Lease

Rentals can be tailored to suit your cashflow, for a period of hire to suit your requirements. Funding is off balance sheet, so leaving your gearing and liquid ratios unaffected. Risks and rewards of ownership lie with the lessor. The leese cannot be liable for any residual value risks.
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Partnership

An agreement which exists between two or more parties in common, with a view to making profit. Each partner normally has unlimited liability for the debts of the partnership.
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Peppercorn Rental

The nominal rental paid during the secondary period of a finance lease.
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Renewal Option

An option to renew the lease at the end of the initial lease term upon payment of further rentals.
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Residual or Residual Value

The projected value of equipment at the conclusion of the lease term.
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Return Conditions

The customers obligations with regard to the condition of the asset at the date of its return to the lessor.
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Sale and Leaseback

An agreement whereby an asset already owned by the customer is sold to a lessor thereby releasing capital. The customer then enters into a lease with that lessor for those assets sold.
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Sales Aid Finance

A facility offered to manufacturers and suppliers of equipment that enables them to make it easier for their customers to buy their goods. Options offered by funders often include finance leasing, lease purchase and operating leasing. Also known as Vendor Finance.
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Tax Variation Clause

A clause in a lease which allows the lessor to vary the rentals if either the rate of tax or the tax system changes.
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Tax Written Down Value

The value of an asset after deducting the total depreciation allowances claimed from the cost of the asset.
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Turnover

Sales revenue net of value added tax.
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Working Capital

Current assets less current liabilities. Working capital is the amount of money a business needs to keep in circulation to pay its bills and wages.
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