Operating Lease from Construction Finance UK

Operating Lease is a low cost form of financing. It is suited to Construction, Manufacturing and Associated Equipment. By paying the required rental the customer obtains all the benefits of the equipment without the responsibility of ownership.

An Operating Lease on its own means the customer is sharing the operating risks. The leasing company or the supplier take the residual value risk whilst the customer takes the risk of unexpected repair bills or machine operating costs.

An Operating Lease offers off balance sheet funding with fixed low cost lease rentals reflecting a predicted future residual value, which remains unpaid by the customer. This residual risk is taken by the leasing company or the supplier who recover the machine at the end of the period and sell the asset to fund this unpaid amount.

This transfer of risk allows the customer to treat the asset as off balance sheet funding - which can facilitate significant improvements on some of the key accounting ratios like return on capital employed.

If it is required a repair and maintenance contracts may be agreed with the supplier and the additional cost added to the agreement rental, this type of agreement which then becomes better known as Contract Hire - a method of operating construction plant.

BENEFITS
- Low initial outlay
- VAT paid on each rental spreading the cost of VAT
- Reduced fixed repayments
- Tax efficient
- Preserves working capital reserves
- Removes residual value risks
- Off balance sheet funding
- Can be linked to repair and maintenance contracts to offer total peace of mind

Please Contact Us for details of our Operating Lease Rates