An Operating Lease is a flexible way of enjoying the benefit of an asset without purchasing it outright.
Low rentals are achieved by basing them on a percentage of the initial capital cost of the asset. The finance company bears the risk of recovering the rest from resale of the asset at the end of the agreement.
- You have full use of the asset without buying it outright
- Rentals can typically be offset against profit before tax
- If you are registered for VAT, you can normally reclaim VAT on the rentals
- Rentals are considerably reduced as they are based on a percentage of the original capital cost
- Rentals can be arranged to mirror customer’s cash flow
- End of term flexibility – the opportunity exists to re-rent the asset for a further term or you simply return the asset
- Flexible rental terms from 2 years upwards. Rental periods can be matched to the planned use of the equipment
- This form of funding can be classified as “off-balance sheet” funding subject to conditions approval.