Leasing and Operating Leasing

Leasing and Operating Leasing


Where ownership is not required, finance leasing works well for a broad spread of business assets including machinery and vehicles.

Key features & benefits:

  • Preserves working capital – offers the obvious cash flow benefits of paying in instalments.
  • Initial deposits can be as low as one repayment/rental down.
  • Flexible – repayments/rentals can be structured according to your anticipated trading cash flow.
  • Tax efficient – the repayments/rentals can normally be offset against taxable profits and the rentals can be offset against VAT for the life of the agreement.
  • Cost-effective – the Lessor, as owner of the asset, claims the writing down allowances and passes them on to you in the form of lower repayments/rentals.
  • At the end of the lease you can continue renting the equipment by paying annual secondary repayments/rentals or sell the goods to a third party and retain up to 99% of the sale proceeds.


This is a rental agreement which can be used to finance a broad spread of business assets but is particularly effective for financing larger assets e.g. refuse vehicles, large industrial plant, ships, planes etc. The Lessor builds in a residual value to reduce the rentals, thus helping cash flow and making ‘off-balance sheet’ funding possible (subject to current IFRS and GAAP Accounting Rules).

Key features and benefits:

As Leasing, plus

Competitively priced – the Lessor or manufacturer takes the risk in the residual value of the equipment and factors this into the rental, bringing down the periodic cost to you.

Asset can be treated as ‘off-balance sheet’ (subject to your auditors’ approval).

Flexible – at the end of the term, you can return the asset or extend the period. Either way, you do not carry the problem of disposal of the equipment.