FAQ

Is BFL offering me a Finance Lease or an Operating Lease?

An Operating Lease. The relationship between you and BFL is of the nature of a hirer/hiree relationship, as stated in our Master Rental Agreement (MRA).   

What is the difference between BFL and bank finance?

The key differences between BFL and bank finance are:

ü  All-inclusive Service 

Our product is much more than a financial supply.  You only need to provide us with a list of barrels.  We handle the process from there – purchasing, payment, sea-freight arrangements, inland transport and insurance.

ü  Industry expertise

We buy and ship barrels ourselves, and we are the number one customer of most Cooperages in the Asia Pacific region.  We know the oak business intimately and our industry knowledge and connections are highly valued.

ü  Economies of scale when purchasing barrels

While we pride ourselves on being completely independent and will not favour one cooper over another, we purchase a very large number of barrels each year.  As banks simply provide funds, not a purchasing service, they are not able to realise the same economies of scale.

ü  All inclusive figure quoted

The rental figure quoted to you covers all of the costs associated with your barrel procurement including freight, clearance and insurance.  There are no application fees or processing fees. 

What is your interest rate?

We aren’t giving you a loan, we are renting you barrels.  You aren’t being charged interest, you are being charged rent.  

The rental payments charged are calculated based on a variety of factors, the obvious and main factor being how much the barrels cost us.  

Other factors we take into consideration include how long you agree to rent the barrels for, when we need to pay for the barrels as opposed to when you start renting them and the total number of barrels you are renting. 

What are the tax benefits of renting my barrels?

Renting your barrels through BFL means you no longer need to calculate and keep track of tax depreciation for your barrels - a confusing and time consuming exercise.  

Because you are renting the barrels instead of purchasing them, you no longer need to depreciate them for tax purposes.  Instead, you simply claim the rental payments as tax deductions in the year in which the payments are made.

What are the GST benefits of renting my barrels?

GST will be charged on rental payments and if you are entitled to claim the input tax credits, you can do so in the period in which your rental payments are made.  

Clients tell us that it’s frustrating from a cash flow point of view to come up with the GST for barrels being purchased outright – it’s money that only needs to be paid out until your next BAS refund, but it’s usually a material amount.  By renting your barrels, the GST payments and refunds are spread across your use of the barrels, making cash flow much easier to manage.

Additionally, many other types of finance will not allow you to finance GST, meaning that money still needs to be found, even if the barrels are to be financed.  This is not the case when barrels are rented through BFL.