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1 Financial Solutions that are right for your business now and in the future BT Finance BT Finance

2 Financial solutions that are right for your business now and in the future. Every day thousands of UK business s review their efficiency, and part of that review will include the communications system. BT, with its renowned products and services, are an obvious choice to provide you with the solution to meet your business needs. Whilst deciding on your requirements, another decision you will make is how will you finance it This is where we can assist. The power and benefits of rental. With our financial expertise we can develop a rental option tailored to suit your business. This can be as simple as 12 quarterly payments over a 3 year period, or varied payments over a 7 year period. Our rental options provide you with the ability to create a payment profile which suits you and your business needs. And importantly these payments are fixed, so when bank rates go up our s don`t. The other great advantage of having your ICT solution from BT, with an integral finance option is that at any point during the contract you can add more technology, with our inbuilt creative technology refresh option where we give you a percentage back against payments you have already made you might not even have to increase your payments does that sound interesting? So you can constantly keep pace with technology changes. The right finance solution means businesses can have the latest equipment in the most affordable way. The benefits are: Have the solution you need rather than what your budget dictates. Improves balance sheet ratios. Budget control inflation proof payments. Keeps pace with technology changes. What does a BT Finance Rental Plan offer? It enables you make regular fixed repayments to meet your cash flow and budgetary requirements, over a time frame to suit you. Overall, a cost-effective alternative to paying a one-off, up-front capital outlay and keeps working capital in your business rather than tied up in a depreciating asset. Helps you keep pace with technology changes, offering easy upgrade and refresh options. Keeps your existing credit lines preserved for other purposes.

3 The Benefits Close-up. Cash Flow and Capital Outlay Can your business support a large initial capital outlay or is it more appropriate to preserve your cash flow? Rental allows you to make fixed regular payments over time and so maintain a positive cash flow. Furthermore, rental payments can be made by direct debit saving you time in organising payment of invoices. Existing Borrowing Facilities How flexible are your existing borrowing arrangements? A rental option is an additional source of funds that allows you to retain other existing facilities. If you choose to rent, existing credit lines with your bank, for example, remain intact giving you the additional flexibility to use these arrangements if necessary, in the future. Tax Efficiency Do you have a requirement to reduce the amount of tax your company pays? Rental payments may be deducted from taxable profits thus reducing your tax bill. Preserves Working Capital Does your working capital have the capacity to meet all the demands of your business? Renting equipment allows you to utilise capital reserves for other purposes such as new business opportunities, responding to unexpected business issues, product development or marketing. If you buy the equipment outright, the capital invested becomes tied up in a depreciating asset and cannot therefore be used for other projects. Predicting Changing Requirements Are your equipment requirements subject to change over time and are you able to predict what these changes may be? A rental option allows your business to easily keep up with the changes in technology and respond to any industry or competitive pressure with the ability to add or replace equipment either during or at the end of the rental agreements. See the examples over the page. Budgeting and Control Do your existing budgeting procedures require expenditure forecasts? Rental payments are fixed over time regardless of interest rates and inflation fluctuations making forecasting simpler and more reliable. As rental payments can usually come from the operating budget, you may be able to acquire a Telecoms and IT solution not originally planned in the capital budgeting process.

4 Change Option Facility explained in more depth. Let s take a typical customer with a quarterly rental cost of over a 3 year (12 quarter) term. 1. The Original agreement is set up as represented in the diagram below After 4 quarterly payments have been made, the customer decides they need to add more equipment to their solution and add extra features such as voic and new software applications. Using the matrix on the Rental Plan document, we look up the allowable change percentage based on the number of payments made so far. Change Percentages at the end of each quarterly Payment Period during the relevant Minimum Period Payment Period Number months (%) Minimum period 60 months (%) 36 months (%) Allowable Change Percentage 3. We then reduce the payments by the Allowable Change Percentage and reschedule the agreement over a new term equal to the original term, ie. in this case a further 3 years. Payments over new term Lastly, we add the rentals for the new equipment/solution to the reduced rental for the retained equipment to arrive at the total new rental figure. In this example, the overall total rental has remained constant, however there is no reason why this can t increase or decrease depending on how much additional equipment/solution is required. Rentals for new equipment Rentals for retained equipment

5 And finally, a closer look at the Add-on Facility. Used to add extra equipment to an existing rental agreement without extending the period of the agreement. The rental value for the new equipment being acquired is simply added to the existing rental for the remaining term. Therefore, the total rental amount increases but the agreement end date stays the same. Additional rental for equipment added midterm Summary Some Frequently Asked Questions Q. How could my business benefit? A. Organisations large and small benefit from spreading the cost of new Telecoms and IT acquisitions. Instead of buying only what the capital budget allows, leasing enables you to comfortably afford the solution your business really needs. You can optimise productivity, maintain your competitive position and take advantage of clear cash flow advantages. Q. Do many businesses lease? A. GE currently provide leasing solutions to 40,000 customers, public sector bodies, the professions and a whole range of sole traders and partnerships. All are different in structure and size and yet all have chosen leasing as their preferred method of acquiring the technology they require to meet their needs. Figures provided by the Finance and Leasing Association indicate that leasing is an established and growing method of technology financing. Q. If I have the capital available, isn t it better to pay cash? A. The benefit to your organisation of the very latest Telecoms and IT solutions is in their use not their ownership. Cash (working capital) can be much better employed and invested in your business. There is no need to pay a significant capital sum in order to gain the benefits of using the latest technology pay for it as you use it as you do for your staff, vehicles, rented offices and other associated business costs. The power of association. GE has been working in collaboration with BT for over 12 years. This gives us an insight and ensures the BT Finance team understands the telecoms market, and also the finance requirements that all businesses have. The BT Finance name is synonymous with BT s own standards.

6 BT Finance Ltd. is a wholly owned subsidiary of GE Capital Equipment Finance Ltd, part of GE Commercial Finance, one of the 6 core businesses of the General Electric Company (USA), a global technology, media and financial services company. With lending products, growth capital, revolving lines of credit, equipment leasing of every kind, cash flow programs, asset financing, and more, GE Commercial Finance plays a key role for client businesses in over 35 countries. BT work with GE Commercial Equipment Finance because of their financial expertise, stability and professionalism. Together they have developed a simple, versatile form of funding ideally suited to communications and IT equipment with built-in flexibility. GE already provides solutions to over 40,000 BT customers, from Sole Traders to Blue Chips, from charities to public sector bodies. Different sizes, different challenges, different goals but all have found the right solution with the right benefits, with the help of BT Finance Ltd. GE Capital Solutions The Mark is a trademark of The General Electric Company. BT Finance* is a trading name of GE Capital Equipment Finance Ltd, part of GE - Capital Solutions * BT Finance is a registered trade mark of British Telecommunications PLC used under licence by GE Capital Equipment Finance Ltd, 2630 The Quadrant, Aztec West, Bristol BS32 4QG