At MicroStep South Africa we aim to assist you in growing your business and assisting you in securing growth for yourself and your employees.


At MicroStep South Africa we aim to assist you in growing your business and assisting you in securing growth for yourself and your employees.


Finance Your Machine Through MicroStep South Africa and Merchant West

Customer Benefits

  • No upfront cash outlay or deposits. Customers retain working capital i.e. the company’s cash flow position may preclude the outright purchase of assets or these cash funds be better utilised for working capital requirements to increase operating efficiency and / or support growth.
  • VAT is paid over the term of the rental but can be claimed back. Large upfront input VAT claims from SARS on cash transactions are avoided, as those could put the company’s cash flow under pressure.
  • Tax deductions / allowances can be accelerated by way of deducting the full rental payments over the term of the lease vs claiming Wear & Tear allowances (W&T) over the period of the asset’s useful economic life as stipulated by SARS.
  • Certain rentals are off balance sheet transactions and therefore deemed to be an expense to the customer. Off Balance sheet financing either to comply with existing debt covenants or to maintain published performance targets. New IFRS / IAS16 (previously IAS17) provides guidance.
  • Rentals can be structured with the following: Payments in advance / in arrears; with deposit; with balloon payments (reduce monthly payments over initial period); with RV’s; with escalations; skip payments or deferred payments; monthly / quarterly / semi‐annual payments. It is extremely flexible and has numerous tax advantages. Flexibility in the terms of the lease could allow for escalations (which can be linked to CPI or estimated future revenues), extended lease dates, repurchase of the asset(s) or early termination rights.
  • Loan to value ratio (LTV Ratio) of 100% if compared to other financing instruments (0% deposits).
  • No need to finance the initial input VAT claim as would be the case for a HP / Installment Sale transaction.
  • Enhance financial ratios such as debt / equity (gearing), interest cover, liquidity and working capital ratios, return on capital and return on assets.
  • Existing credit lines are unaffected (fresh source of funding).


  • Fixed nature of operating expense makes budgeting easy.
  •  The operating expense “Opex” budget will be utilised for a rental and not the capital “Capex” budget. This allows for quicker decision making and acquiring assets outside “buying season”.
  • Leasing ensures your equipment remains up‐to‐date. A rental/lease, passes the financial burden of obsolescence and residual value risk onto the equipment leasing company. Often, vast amounts of un‐utilised equipment take up valuable space at a high cost to company. If the three‐year lease on any of your ICT systems has expired, you are free to lease the latest / cutting‐edge equipment on the market.
  • “Hardware as a service”. Merchant West is able to finance certain components of a project that are not normally financeable for example 100% of software and licensing costs, implementation / installation / configuration costs, planning / project management / training (UAT) costs, maintenance & support fees, cabling, WiFi solutions etc.
  • The company might only require temporary use of the asset without the need to acquire eventual ownership
  • Avoid entering into a “grudge purchase” transaction (replacement strategy e.g., laptops)
  • Prioritising the use of an asset is more important than wanting to own it
  • Liquidating these assets will bring business operations to a standstill
  • Transfer the risks associated with ownership to a 3rd party (risks such as asset idle time / technology obsolescence etc.)
  • The useful lifespan of equipment has been steadily declining. This is coupled with continuing drops in acquisition costs because what you pay for today is
    worth less tomorrow, never mind in a couple of years’ time.
  • Ease of administration. Assets under rental agreement do not require maintenance in the user’s asset register or complicated balance sheet accounting entries, but are merely a periodic operating expense. Audit costs are reduced.
  • Rental “implies” that they become predictable, thereby enhancing the reliability of the firm’s business plan.
  • Contract flexibility whereby cost centers can be billed / upgraded separately or aggregated.
  • Merchant West representatives are able to view AFS at customer premises to maintain confidentiality of client information (if required).

If you are successful, we are successful.

We are aware that our solutions may seem daunting to some. This is why our sales and financing team will discuss and present you with a calculation to show you a solutions investment vs outsourcing costs.

Our goal is to showcase the full potential of investing in a MicroStep System, even if financing it yourself is out of reach. Our partnerships with financial institutes can be beneficial to you and your business growth.


• You will be contacted by a specialist from the relevant Leasing company
• They will request you to send relevant company information
• A vetting process will be done and the outcome will be communicated with you.

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