Maintained Schools and Academies: A Guide to Leasing

Leasing for Academies is becoming much easier.

You may have missed the DfE update on the IFRS 16 leases implementation: 

https://www.gov.uk/government/publications/esfa-update-2-march-2022/esfa-update-local-authorities-2-march-2022

 

In summary, under IFRS 16, there is no longer a classification distinction between an operating lease and a finance lease.

This should mean that, subject to clarification and confirmation in the 2022 Academy Trust Handbook, from September, Academies will no longer need to get Secretary of State approval to enter into a finance lease for any of the following:

  • IT equipment

  • telephony

  • catering equipment

  • furniture

  • bathroom/sanitary equipment

  • gym equipment

  • grounds keeping equipment

  • minibuses and other vehicles for the use of the school

  • temporary classrooms and equivalent structures

This opens up the opportunity for Academies to invest in improving facilities with the funding costs being spread over the lifetime of the asset rather than utilising reserves or constantly making grant applications.

Key Features:

  • No deposit, 100% funding usually available for purchases made using a finance lease.

  • Fixed Rates from 1 to 7 years.

  • Unsecured funding also available in excess of 5 years

If you are looking to take advantage, then these are our top tips:

1) Get quotes for provision of the services (with and without a lease option)
2) Let us shop around for your lease finance (it will almost certainly be cheaper than the suppliers’ quotes).

We offer a completely free lease quoting and arrangement service. 

All you need to do is:

  • Send us a copy of the quote for the works / products / installation you wish to carry out

  • If you already have a lease quotation, please send us a copy

  • Let us know the term you would like to fund it over (usually up to 5 years but, for some assets we can arrange a term up to 7 years)

We will then arrange a completely no obligation quote for you and we will support your application for finance if you decide to use the quote.

We will not charge you a fee for this service as the funder usually pays us an introducer fee.

Finance Leases. Why?

The opportunity to retain your reserves and fund the assets over their lifetime spreading the cost across multi year funding.

Asset finance usually benefits from no arrangement fees

You do NOT need to take your equipment supplier's leasing arrangements.
You Have a Choice.

Finance and operating leases for academies

Our research tells us that, if a school decides to fund using a Lease, almost without fail, they will :
 

  1. Choose the suppliers funding solution

  2. Do not research other options

  3. Do not use a broker to help them source better terms.



Let's look at the alternative options and 'bust a few myths'

  • You DO NOT need to use your suppliers Lease option. There is a good chance that you can achieve better rates for the lease elsewhere but still get your equipment from the same supplier.

  • You absolutely should shop around. Rates and costs can vary significantly.

  • We will shop around for you and we do not charge you for doing so (as the lease company will pay us a commission much the same as the lease company pays your supplier a commission if they arrange the lease for you).


If you are not sure if the equipment you want to purchase can be obtained on a Lease, ask us. We will be happy to explore for you.