Operating Lease
An operating lease is a very straightforward lease agreement. The operating lease consists of two parties a) the company (the lessee) and b) the finance company (the leaser). Essentially the finance company will purchase the assets for the lessee and in return as stated by the operating lease agreement, the company will made rental repayments.
At the end of the lease term which is usually 5 years, the company can choose whether to purchase the leased assets for an agreed value, upgrade the assets in the lease to new ones, extend the or hand the assets back.
Benefits of Operating Lease
- Fixed interest rate for the full term of the operating lease
- Fixed monthly lease repayments
- Operating lease is not recorded on the balance sheet
- No liability for the asset
- The operating lease doesn’t appear as a liability
- The operating lease repayments appear an operating expense against the company’s income.
Would you like one of our operating lease consultants to give you some advice on an operating lease? Call 1300 628 562 to speak to one of our helpfully consultants. Alternatively you can fill out our online application and receive an answer within 10 minutes.
Operating leases fall into two categories:
Fully Maintained Operating Lease
Non Maintained Operating Lease
Fully Maintained Operating Lease
With a fully maintained operating lease enables a company to continue their daily operations without any interruption and need to maintain or service the fleet.
Why Use A Fully Maintained Operating Lease?
By opting for a fully maintained operating lease the service and maintained is included in the lease repayments which means your internal operations are minimally effected.
What Assets Can Be Leased In A Fully Maintained Operating Lease?
A fully maintained operating lease gives you the flexibility to lease:
- New and/or used motor vehicles
- Vans and utes
- Light and heavy commercial vehicles
The only requirement is the vehicles worth more than $10,000 at the commencement of the fully maintained operating lease.
Fully maintained Operating Lease Term
We have fully maintained operating leases from 1 to 5 years. (At the end of the lease term you can opt to extend the lease term).
Fully Maintained Operating Lease Repayment Schedules
For our fully maintained operating lease you make monthly repayments on the lease.
Non Maintained Operating Lease
There a huge saving that can be made when taking out a non-maintained operating lease. As the assets are your responsibility to maintain and service you can use your cash flow to increase revenue without the expense of a fully maintained operating lease.
Why Use a Non Maintained Operating Lease?
You control the maintenance and repairs of the fleet, which means you, can use the cash flow saving on daily operations.
What Assets Can Be Leased In A Non Maintained Operating Lease?
A non-maintained operating lease can is great for commercial vehicles both light and heavy as well as vans and other motor vehicles. Just bear in mind the assets should be worth at lease $10,000 at the time of signing the operating lease contacts.
Non Maintained Operating Lease Term
Our non-maintained operating lease agreements are from 1 to 5 years but can be extended at the end of the lease term.
Non Maintained Operating Lease Repayment Schedules
As with a fully maintained operating lease a non-maintained operating lease can be leased over a period of 1 to 5 years.
