Operating Lease
About Operating lease
An operating lease is particularly attractive to companies that continually update or replace vehicle and want to use the vehicle without ownership, but also want to return the vehicle at lease-end and avoid obsolescence. An operating lease usually results in the lowest payment of any financing alternative and is an excellent strategy for bypassing capital budgeting restraints. It typically qualifies for off-balance sheet treatment and can result in improved Return On Asset due to a lower asset base. It can also result in higher reported earning in the early years of the lease.
The benefits of an Operating lease?
Eliminate asset risk
The lessee does not have to worry about the asset risk – the lessor takes the risk and disposal responsibility.
Not on your balance sheet
This type of financing does not appear on the balance sheet of the company, thus gives your business scope to improve performance ratios, such as return on assets.
Tax deductible
When vehicle is used for business purposes, leasing payments are usually tax deductible.
One fixed monthly payment
Helps the company to make budget forecast more accurate and protects against interest rate fluctuations.
Access working capital
Finance repayments are spread over time so you keep your cash reserves for more effective use.
Is Operating lease right for me?
An operating lease is an ideal solution if your business wants to have the latest models by continually upgrading its vehicle fleet or do not want to take the residual value risk on the asset.
Downloadable Forms:
For individuals
For corporate clients
