Rental and Operating Lease
A Rental and Operating Lease can offer better flexibility than outright purchase, allowing you to upgrade, purchase or return the equipment at any time. They are a great option for businesses that may need to frequently upgrade their equipment.
What are the benefits of Rental and Operating Leases?
A Rental and Operating Lease permits your business to use the equipment being leased, but doesn’t provide ownership. This provides balance sheet relief for businesses as the lease is considered an operating expense, and is not recorded as an asset. This can provide some tax benefits if the equipment is a vehicle used to earn income and can be handed back at the end of the lease with no resale value risks.
Some end-of-term options for rental and operating lease’s include:
- Upgrading the equipment to the latest technology available, ensuring your technology always up-to-date.
- Return the equipment.
- Continue on a month-to-month basis.
- Make an offer to purchase the equipment.
*The above should be used as a guide, please contact your Accountant or Financial adviser to see what is applicable to your business.
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