HOW IT WORKS

We have co-developed a customized operating software that is the system we use to run our rental portfolio. The system has been audited by Deloitte and the IFC on multiple occasions and is used in our data mining activities. The System generates our monthly invoices, debit order runs and produces our customer age analysis. The system allows us to maintain our clients and the associated assets from start to finish. The system contains the data and tools used in the management and decision making process, this includes valuation of the assets net present value, taking into account escalation, rental and discounted rate. The team is able to report on and provide any required information to the client or supplier at any moment. The system is checked on a monthly basis by the finance team and used in the creation of monthly management accounts for sign off by the Directors.

The portfolio is separated into defined client categories. Clients are categorised on factors including size, industry and business type. We use the categories to ring fence or limit certain industries seen as higher risk. The categories are also used to limit deal sizes, client exposure, term of deal and the required rate of return on the deal. This is to best manage a high yielding low risk portfolio. Portfolio limits and rates are decided on, monitored and adjusted by the steering committee on a regular basis.

CREDIT ASSESSMENT PROCESS

The following are considered when assessing credit application and although this is a judgemental process, the mandated officials have extensive experience:

• Applications will always be supported by an asset. This eliminates the risk of speculation, funding of owner equity, cross border funding or raising of working capital

• Through the information provided, consideration is given to suitability of equipment to the business and the relevant need in the event that the request is non- office automation

• Assessment of credit worthiness of the client through the detail contained in the ITC report, previous references via suppliers if the applicant has an existing relationship with the supplier/ agent or Custom Capital.

• Consider the duration of business (minimum period in business is 3 years)

• Financial performance sufficient to meet the monthly and total contractual obligation of the applicant. Aspects considered are equity, profitability, gearing, ability to meet current and future interest payments (EBITDA).

• Ensuring there are no adverse trends evident

• Reviewing the Cash Flow statement to ensure sufficient cash is being generated to meet current, future and proposed obligations

• Although the credit is granted on the strength of the balance sheet opposed to traditional asset-based finance credit assessment, there will a validation done to ensure the assets are priced within acceptable ranges

• Suretyship of shareholders/ directors/ members/ trustees or relevant principals will be obtained. In the exceptional cases where this requirement is waived, this will be approved, briefly motivated and recorded on the approval sheet.