Asset finance (instalment sale)
Solar finance glossary · South Africa
Quick definition
Asset finance (instalment sale) is a loan structure in which a business buys a solar system and repays the purchase price plus interest in fixed monthly instalments over an agreed term, with the equipment itself serving as security for the credit.
In South Africa this is the most common way an owner-occupier business funds a commercial solar installation. Terms typically run from 3 to 7 years, sometimes longer for larger systems. The financier registers a security interest over the equipment and may require a deposit, surety from directors, or a cession of insurance. The business carries the asset on its balance sheet from the outset and is responsible for maintenance and insurance.
Ownership from day one is what makes this structure attractive for tax: the accelerated depreciation available under Section 12B is claimed by the purchasing business, subject to the rules in force for the year the system is brought into use.
ArkFlow is a software platform that facilitates the packaging of an instalment sale application, including the financial proposal and supporting documents, for submission to funders.
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Solar Asset Finance Explained: Own Your System From Day One →Solar asset finance, also called an instalment sale, equipment finance or a solar loan, lets you own your system from day one and pay it off over 3 to 7 years.
ArkFlow is a software platform that facilitates solar finance origination. It is not a bank, lender, credit provider, tax adviser or financial adviser. This definition is general information, not a credit offer or advice. Funders make their own credit decisions and tax treatment should be confirmed with a registered practitioner.