understanding rental terminology
| Term | Definition |
| A | |
| Asset Inflow | Assets that are received by Spartan for the first time (i.e. end of rental return, or buyback) |
| Asset Lifecycle Management | Spartan’s methodology to optimize handling of assets from procurement to disposal |
| Asset Outflow | Assets that are refurbished and then remarketed to secondary market, for renting or sale |
| B | |
| Broker | A company or person who arranges, for a fee, transactions between lessees and lessors of an asset |
| Buyback | A situation where Spartan purchases existing assets from a customer |
| C | |
| Capital Expenditure | A capital expenditure is incurred when a business spends money either to buy fixed assets or to add to the value of an existing fixed asset (such as a building) with a useful life that extends beyond the taxable year. For example, the purchase of a photocopier is the CAPEX, and the annual paper and toner cost is the OPEX. |
| Capital lease |
Type of lease classified and accounted for by a lessee as a purchase and by the lessor as a sale or financing, if it meets any one of the following criteria:
(a) the lessor transfers ownership to the lessee at the end of the lease term (d) the present value of minimum lease rental payments is equal to 90 percent or more of the fair market value of the leased asset less related investment tax credits retained by the lessor. (Also see finance lease.) |
| CAPEX | See Capital Expenditure |
| Cash Flow | The balance of the amounts of cash being received and paid by a business during a defined period of time |
| Channel | Set of processes that bring in new business to Spartan e.g. alliances, online, partners, etc. |
| Corporate Information Systems | Spartan’s operational tools and procedures that include IT, people, processes and policies |
| Customer relationship management (CRM) | A term applied to processes used by a company to handle its contacts with its customers. CRM software is used to support these processes, storing information on current and prospective customers. |
| D | |
| Data cleansing | The removal of data from hardware according to standards set by the Department of American Defense |
| De-manufacturing | Process of harvesting parts from the assets that are no longer in working condition |
| Disposing | Process of extracting salvageable basic raw materials following de-manufacture of the asset |
| Direct Sales | Spartan’s in-house sales team that engages with customers directly |
| Disposal | Acquiring assets that are no longer being used from customers in order to redeploy in secondary markets such as un-established micros |
| E | |
| Economic life (Useful Life) | The period of time during which an asset will have economic value and be usable. |
| Effective lease rate | The effective rate (to the lessee) of cash flows resulting from a lease transaction. To compare this rate with a loan interest rate, a company must include in the cash flows any effect the transactions have on federal tax liabilities. |
| Enterprise / Large business | This client typically has over 500 IT technology users |
| Equipment schedule | A document that describes in detail the equipment being leased. It may also state the lease term, commencement date, repayment schedule and location of the equipment |
| Essential Technology | Set of core technology hardware that business’ need to run efficiently, i.e. computers, printers, copiers, PABX, networking, servers, and security/access equipment. |
| E-Waste | Electronic waste generated by broken or unwanted technology assets |
| F | |
| Finance lease | Typically, a finance lease is a full-payout, non-cancelable agreement, in which the lessee is responsible for maintenance, taxes, and insurance. |
| Full Maintenance Rentals | Complete outsourced rental solution for assets including advisory, procurement [supply], loan units, maintenance and insurance |
| G | |
| H | |
| Hire | Payment for the temporary use of something |
| Hiree | See Lessor |
| Hirer | See Lessee |
| I | |
| Indemnity clause | A clause in which the lessee indemnifies the lessor from loss of tax benefits. |
| Indirect Sales | Spartan’s partner ecosystem that provide leads and opportunities for Spartan to complete. |
| Information Technology (IT) Assets | Desktops, laptops, small x86 based servers and their supporting accessories. |
| J | |
| K | |
| L | |
| Lease | A contract in which one party conveys the use of an asset to another party for a specific period of time at a predetermined rate. |
| Lease rate (Rental Payment) | The periodic rental payment to a lessor for the use of assets. Others may define lease rate as the implicit interest rate in minimum lease payments. |
| Lessor | The party to a lease agreement who has legal right to equipment or property, who grants the lessee the right to use the equipment or property for the lease term, and who is entitled to the rental fees |
| Lessee | A person or entity who receives the use of leased property for a predetermined sum of money over a predetermined period of time |
| Long Term Rentals | New or used asset rental of 1 year or more (less than 1 year is short term rental). Usual period is 3 years [36 months] |
| M | |
| Medium business | A medium client typically has between 50 to 500 IT technology users |
| Micro business | A micro client typically has less then 10 IT technology users, whereas a small client will have between 10 and 50 IT technology users |
| Micro Leasing | Renting used assets to micro businesses, less than 3 years old, who cannot afford to buy new ones |
| N | |
| Non-recourse loan | In a leveraged lease, the lenders cannot look to the lessor for repayment. The lender’s only recourse is to the lessee and, therefore, the lessee’s credit rating is of prime importance |
| O | |
| Operating Lease | Any lease that is not a capital lease. These are generally used for short term leases of equipment. The lessee can acquire the use of equipment for just a fraction of the useful life of the asset. Additional services such as maintenance and insurance may be provided by the lessor. |
| Operational Expenditure | An on-going cost for running a product, business, or system. For example, the purchase of a photocopier is the CAPEX, and the annual paper and toner cost is the OPEX. |
| OPEX | See Operational Expenditure |
| Outsourcing Solution | Subcontracting of services to external vendors e.g. IT asset leases or networking. |
| P | |
| Partner Program | Program designed to create, train and service Spartan’s partner ecosystem |
| Physical Asset Management | Asset handling services e.g. tagging, setup, inventory, shipping logistics, etc. |
| Present value | The current equivalent of payments or a stream of payments to be received at various times in the future. The present value will vary with the discount interest factor applied to future payments. |
| Purchase option | A provision by which a lessee has the right to purchase the equipment at the end of the term |
| Q | |
| R | |
| Redeployment | Acquiring assets that are no longer appropriate for the customers, refurbishing the assets and then returning them back to the customer in a manner as requested by the customer |
| Refurbishment | Process of restoring the software and hardware of the assets to working condition |
| Remarketing | Process of selling assets to the second hand PC markets to maximize the remaining value |
| Renter / Rentee | Someone who pays rent to use land or a building or equipment that is owned by someone else |
| Rentor | An owner of property or equipment who receives payment for its use by another person |
| Residual Financing | Low effective interest rate for financing assets for enterprise customers which is based on taking residual risk on the asset. This is sometimes offered to very large enterprise customers to offer a competitive rental solution. |
| Residual Recovery | Process of recovering the residual risk taken when doing residual financing. The recovery is through secondary markets, for example short term rental, long term rental [micro customers], or even cash sales. |
| Residual Risk | Where Spartan takes a risk on a small portion of the capital financed. For example, if Spartan took a 5% residual risk on a R100,000 deal then the customer will only repay 95% [R95,000] of the capital over 3 years and Spartan would have to recover the 5% [R5,000] residual risk at the end of the rental period. |
| Residual value | The value of an asset at the conclusion of a lease. |
| Return on Assets (ROA) | An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. |
| Return on Equity (ROE) | A measure of a corporation’s profitability that reveals how much profit a company generates with the money shareholders have invested. |
| Return on investment (ROI) | The ratio of money gained or lost on an investment relative to the amount of money invested. ROI is usually expressed as a percentage rather than a fraction. ROI is most often stated as an annual or annualized rate of return |
| S | |
| Sales Distribution | Spartan’s policy of creating a network of direct / indirect channels to access target markets |
| Sale and leaseback (Sale and rent back) | An arrangement whereby equipment is purchased by a lessor from the company owning and using it. The lessor then becomes the owner and leases it back to the original owner, who continues to use the equipment. |
| Secondary Market | Any customer that we can market the used assets to. I.e. short term rental to any customer segment, long term rental to micro customers [less than 3 years old], or cash sales to any customer segment. |
| Small business | A small client will have between 10 and 50 IT technology users |
| SMME | Small, Medium and Micro Enterprises (detailed breakdown in sales distribution report) |
| Spartan Seal | A marketing “stamp/seal of approval” that can be used as a way to promote ‘certified used equipment’ |
| T | |
| U | |
| Un-established micros | A micro business less than 3 years old |
| V | |
| Value Added Services | Additional services offered around renting and disposal. I.e. insurance, support, data cleansing, auditing, etc |
| W | |
| XYZ | |
