Under an operating lease/rental agreement the lessor retains substantially all the risks and benefits incidental to ownership of the leased equipment. Generally the term of the lease is for a period less than the effective life of the equipment, typically, these types of finance do not incorporate a residual value liability for the lessee (customer or borrower). Rather, the lessor (Financier/Funder)makes its own evaluation of the likely market value of the property at the end of the contract term and operating rentals are set accordingly.
Pros
Cons
Small & medium enterprises across all industry sectors, Government, Partnerships, Sole Traders, Clubs, Charities & other non-incorporated institutions
• Instalments are an operating expense
• No balance sheet liability
• Instalments 100% tax deductable
