Finance Options
An Operating Lease is particularly effective for high value, specialised
equipment or for assets needed to support a specific contract. Rentals will be
based on the value of the asset over the period you require it and as a result
can be linked directly to the revenue the asset generates. Unlike a finance
lease, rentals will not recover the full cost of the asset but the Finance
Company protects you from this risk by guaranteeing a residual value at the end
of the term.
You can generally deduct the full cost of the lease rentals from
profits and the asset won’t appear on your balance sheet. Operating Lease is by
no means as popular as contract hire or contract purchase, but in many ways due
to the limited number of finance companies offering the product.
In most
operating leases you only receive the first years tax disc. You may also have to
pay some form of admin fee to start (this is also becoming more popular on
contract hire too). This is available to both personal and business applicants.