Sustainable Classrooms and Sustainable Funding

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Eco Classroom Funding

Lease Purchase on Sustainable Classrooms

As school budgets continue to tighten, the outright purchase of your new Eco-Classroom has become even more difficult; schools will now have to consider alternative methods of payment and operational leasing has become increasingly popular with many Local Authority funded schools.

Under guidelines set out by the DfE the method by which your school is funded determines the type of funding or lease you school should always sign up to.

Sustainable Funding for Eco Classrooms

Local Authority funded schools, and Academies funded via the YPLA, are not permitted to borrow on grant monies received; the only third party lease available to schools funded this way is an Operating Lease. Other establishments such as universities, Independent Schools and those specialising in further education, do however enjoy a greater flexibility when it comes to funding for Sustainable Classrooms.

With access to all types of funding to the UK education sector, we ensure that schools are able to arrange the finance they require to enable immediate accessibility to the new Eco-Classroom you require.

What is Leasing?

Essentially, leasing provides schools with the means to maximize available school funds, leaving existing budget resources untouched to be invested in other areas of development. It is also an effective means of achieving better cash management, given that schools have the ability to spread the cost of repayment.

Benefits of Lease

  • Reputable and well established lessors
  • In line with current IFRS accounting guidelines ( IAS 17 )
  • Competitive lease rates and simple documentation
  • Straightforward and easy to arrange
  • Flexible repayment terms – typically up to 7 years
  • Option to return your eco-classroom at the end of the term for environmental disposal and data erasure
  • Favourable options available should you wish to continue using the eco-classroom

Leasing

A lease generally comes in two forms and is either an operating lease or a finance lease, both agreements are widely available.

In both cases, the assets or equipment is owned by the lessor (i.e. the finance company) during the lease term with rentals paid by the client or school in order to use the equipment.

Operating Lease

This option means that the lessee (school) pays only a proportion of the capital value of the equipment and over a shorter agreement term, usually classed as the eco-classrooms ‘prime life’. An Operating Lease builds in the residual value and rentals are discounted.

At the end of the finance term, the lessee (school) can choose to either return the classroom or continue with the rental agreement.

Finance lease

A finance lease or capital lease is a type of commercial lease. The finance company or lessor is the legal owner of the asset yet will permit the lessee (school) to have use of that asset during the lease, paid for via a series of rentals or instalments over an agreed term. The lessee (school) has the option to acquire ownership of the asset by either paying the last rental or in some cases, a significantly reduced purchase price.

Under a finance lease, the school repays rentals over the term of the lease but the rentals are not discounted and during the lease term the school pays for the whole life of the equipment or asset.

As all of the capital and interest is repaid under a finance lease, it is constituted as borrowing and therefore is not permitted as a method of funding for State funded schools.

Hire Purchase (HP)

Hire Purchase enables the lessee to pay for their sustainable classroom by means of a deposit followed by a series of installments over a period of time. Ownership remains with the finance company until a specified level of payment is reached.

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