OPEX Finance
Nexmed offers tailormade flexible finance solutions for our robotic solutions to suite your business needs.
We have partnered with leading alternative finance institutions to ensure that you receive the most affordable rates with the most customizable finance plan.
The need for OPEX over CAPEX
The COVID-19 pandemic has placed a significant burden on most businesses and hospitals in terms of their financial position.
Many businesses and hospitals have faced significant losses in 2020 due to the COVID-19 pandemic.
As we continue to battle the pandemic, we will need to preserve our capital equipment (CAPEX) budget allocation for emergencies.
For this reason we have initiated tailored OPEX finance solution as part of a risk sharing model to assist both businesses and hospitals in procuring our next-generation technology.
Both the UV-D Robot and GoBe Robot are indicated as devices that actively fight the virus and provide digital adjuncts to augment our human ability, making them an absolute necessity now and beyond the pandemic.
Benefits of OPEX over CAPEX to the end user
- No upfront cash outlay or deposits. Customers retain working capital to be utilized elsewhere in profit making activities.
- VAT is paid over the term of the rental and claimed back. This avoids large upfront VAT payments that put pressure on cash flow.
- Tax deductions / allowances can be accelerated by deducting the full rental payments over the term of the lease vs claiming Wear & Tear allowances (W&T) over the period of the asset’s useful economic life as stipulated by SARS.
- Fixed nature of operating expense makes budgeting easy.
- The OPEX budget will be utilized for a rental and not the CAPEX budget. This allows quicker decision making and acquiring assets outside the “buying season”.
- Certain rentals are off balance sheet transactions. Off balance sheet financing is done either to comply with existing debt covenants or to maintain published performance targets.
- Rentals can be structured with the following: Payments in advance / in arrears; with deposit; with balloon payments (reduce monthly payments over initial period); with RV’s; with escalations; skip payments or deferred payments; monthly / quarterly / semi-annual payments. It is extremely flexible and has numerous tax advantages.
- Flexibility in the terms of the lease could allow for escalations (which can be linked to CPI or estimated future revenues), extended lease dates, repurchase of the asset(s) or early termination rights.
- Leasing ensures your equipment remains up-to-date. A rental / lease, passes the financial burden of obsolescence and residual value risk onto the equipment leasing company. If the five-year lease on any of your equipment has expired, you are free to lease the latest / cutting-edge equipment on the market.
- Ease of administration. Assets under rental agreement do not require maintenance in the user’s asset register or complicated balance sheet accounting entries, but are merely a periodic operating expense. Audit costs are reduced.
- Enhance financial ratios such as debt / equity (gearing), interest cover, liquidity and working capital ratios, return on capital and return on assets.
- Existing credit lines are unaffected (fresh source of funding).
