Finance or operating lease

Finance or operating lease agreements offer a way for companies to purchase new equipment with monthly repayments over an agreed period of time. They are subtly different from one another:


Finance lease

Finance lease is an agreement that provides the client with the risks and rewards that come with full ownership of an asset, but the legal title of ownership resides with the leasing company.

It is also referred to as a full-payout lease under which the lender seeks to recover full cost of the equipment along with interest over the primary agreement term.

After the lease period ends, the client can choose to return the asset or set up a secondary leasing agreement and continue to use it.

Operating lease

Operating lease is where the lessor takes some residual risk in the equipment i.e. where the residual value and the disposal of the equipment at the end of the primary term are the lessors responsibility.

An operating lease will usually require lower monthly payments than the equivalent finance lease.

We have the ability to provide finance and operating leases across a wide range of asset type, including IT and Telecoms, where we use third parties to provide residual value guarantees in the equipment.


Features and benefits
1 A repayment schedule that matches the income generated from the equipment 3 Ability to offset profits against rentals
2 Improved working capital and cash flow 4 Minimum capital outlay