An Operating Lease lets your business benefit from fixed costs and predicted annual use. The equipment remains the property of the Lessor (us) and will need to be returned at the end of the lease term.
- With an Operating Lease, rental and return conditions are fixed/known at the outset
- We take the risk in the resale value of the equipment for you
- Potential for improved cash-flow and tax-efficient payments
How an Operating Lease works
An Operating Lease could improve your business' cash-flow immediately and help to streamline your finances as the rental payment stream can be matched to reflect not only your income pattern, but also the life of any contracts that you may use the equipment to fulfil.
The rental amount that is paid under an Operating Lease tends to reflect the use and, therefore, the depreciation of the equipment over the chosen lease term. This often leads to an Operating Lease having lower rentals over the same period when compared to other lease options such as Finance Lease and Hire Purchase.
At the end of the primary Operating Lease term, you can either return the equipment to us, or, in most circumstances, you can agree with us to extend the lease for further periods.
As the 'user' of the equipment or asset you do not need to worry about the disposal process, that is handled by us as the owner of the equipment or asset. All you need to do is to return the equipment to us on the terms agreed at the end of the lease and our experienced Asset Management team do the rest.
An Operating Lease can have significant tax and financial advantages too compared to alternatives such as Hire Purchase or a Business Loan. The rentals may be treated as a revenue expense for budget purposes and subject to your agreement with your auditors, off balance sheet for accounting purposes.