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►►OPERATING LEASE |
| Generally used for higher value assets i.e. new tractor units or trailers. The leasing company takes into account the value that the asset will have at the end of the lease period, therefore the rentals tend to be lower. |
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- Only assets with an established second hand market whereby the funder can establish a value, are usually suitable (but certain computer equipment can also be considered).
- An operating lease provides a lower payment as the funder takes a residual value risk.
- This product does not appear on the balance sheet as the client rents the goods. This has the benefit of cosmetically reducing borrowings.
- The funder will require a full specification of the asset and its annual usage, i.e. mileage for vehicles or hours worked for contractors plant and machinery. These factors influence the asset value when the goods are returned.
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