Operating Lease

Operating Lease Finance Explained

With an Operating Lease the lender takes the risk of the asset losing it's value or becoming obsolete while you have full use of the asset throughout the whole of the operating lease agreement.  Normally at the beginning of the finance, rental arrangements and conditions of return are fixed.  The lender resells the asset at the end of the operating lease and takes all the risk of the resell. An operating Lease work best when you have a fixed "job" to accomplish over a period of time.  Payments can be structured so your cashflow is not adversely effected.

Operating lease finance is an off balance sheet type and can be of substantial cash flow benefits. Because you do not gain 100% benefit of ownership, the repayments can be much lighter. This is an off balance sheet product and can allow commercial restrictions on purchases (such as holding company restrictions) to be overcome.

In effect this is like a rental for the term of the operating lease.

There are restrictions on what types of equipment this is appropriate to.

How does an Operating Lease work?

If you need a new tool for your business or plant to fulfil a particular order, an Operating Lease could give you just the finance you need.

Use an Operating Lease to make your cashflow better immediately and revolutionise your finances by matching rental payments to your income.i

Because this is like a rental you use the asset for as long as you need it. Then, at the end of the Operating Lease, we keep the asset or you can extend the contract if you feel the need to.

There are significant tax and financial advantages in an operating lease compared to alternatives such as Hire Purchase or a Business Loan.

Who can benefit from an operating lease?

All types in effect. but operating leases are mainly used in the plant and machinery industries.

Get a speedy quote for an operating lease here.