How did the Vcomms funding opportunity come about?
Vcomms Ltd was incorporated in 2001 to provide a new generation of secure wireless and IP solutions for financial transaction networks to reliably link EFTPOS and ATM terminals with financial institutions. Vcomms currently has over 4,000 devices in operation and decided to find an alternative way to fund their 4G upgrade roll-out by privatising their funding source from institutions to individuals. It provides a more effective financing option for them and has the added incentive of giving those involved a regular return of between 15% per annum for 3yrs. At the end of the term, Vcomms will buy back the modems at 100% of the purchase cost (with individual gst consideration varying buyback amount).
Why wouldn’t Vcomms just get finance themselves?
There were several reasons for this. Firstly, offsite asset finance has some pretty hefty interest rates, similar if not higher than the percentage of returns you would be earning. Secondly, it was far more cost-effective for Vcomms to keep the modems off the balance sheets. This way Vcomms is able to write off 100% of the costs associated with leasing the modems from the owners (e.g. you).
Why do we think this is a good opportunity?
In todays unstable economic climate, this opportunity represents a cash return that is very difficult to match! You are paid monthly which gives quick access to cashflow, there is very little set-up time, it takes zero time for you to manage and there are no hidden or additional costs.
Do I have to find locations for my modems?
No, you simply need to purchase the modems, sign the rental agreement and your return begins on the monthly anniversary of your settlement date.
How is this treated for tax?
One of the greatest benefits to owning Vcomms are the depreciation benefits. We have been advised by our accountant that you can depreciate 100% of the value of the modems in 3yrs. This means with 33.3% depreciation and returns of 12-14%, you may be able to offset your modem income as well as have a tax loss for the first three years.Of course when you sell back, you would have to make an adjustment at that time. Please speak to your accountant for personal advice as individual situations vary.
Are there any running costs I should be aware of?
Apart from the initial purchase costs, all running costs and overheads are completely taken care of by Vcomms, as per the Vcomms rental agreement. Vcomms modems have a 5 year replacement warranty from the manufacturer.
The buying process?
It is as simple as making an order, giving us your name and address as well as the BSB and Account number you wish your funds to be remitted each month. Once we have this information, we will reserve your modems and issue your paperwork. You will be emailed a Vcomms Order Form, Bill of Sale and a Vcomms Rental Agreement. You need only to print them out, sign and initial and scan and email them back to us. Payment details for the settlement of the modems are on the Vcomms Order Form.
What is my security?
Vcomms income is derived from financial institutions and security companies who use Vcomms modems for their fleet of ATMs / Electronic safes to connect these devices via the Vcomms communication network. Your security lies in Vcomms contractual obligation within the rental agreement with you, which is additionally backed by the parent company listed as a guarantor.
What is my security after purchasing?
All new owners are encouraged to register their interests over their modems after purchasing via the PPSR (Personal Properties Securities Registrar). This ensures that your interests are protected.
When does my return start?
Your first payment is payable one month from the commencement date of your rental agreement.
Is finance available for this purchase?
Modems are not classified as a registered security, so there is no direct bank financing available for them. Existing clients have purchased with cash, through SMSFs or equity sourced from property. We suggest discussing this with your financial and tax advisors and individual circumstances may vary.
Can I depreciate the Modems?
Yes, Vcomms modems allow some great depreciation benefits. Please consult your accountant to see how best you can depreciate the modems to suit your personal situation.
Why haven’t I heard of owning Vcomms modems before?
This particular opportunity has only recently been opened to the public, up until now, Vcomms purchased their own modems, due to the speed it is growing, Vcomms has decided to open the opportunity up to the public to fund them.
Why don’t Vcomms purchase the modems themselves?
It is more tax effective to keep the modems opex (off Balance sheet) rather than capex, (on Balance sheet). This way Vcomms can write off 100% of the costs associated with renting the modems from the owners. In contrast to capital expenditures, operating expenses are fully tax-deductible in the year they are made.
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