| Operating Lease
 This is a rental agreement which can be used to finance a broad spread of business assets but is particularly effective for financing heavy commercial vehicles. The Funder builds in a residual value to reduce the rentals, thus helping cash flow and making 'off-balance sheet' funding possible.
Key features and benefits:
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Preserves cashflow – offers the obvious cashflow benefits of paying in
instalments. |
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Initial deposits can be as low as one monthly rental down with the VAT spread over the term of the agreement. |
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Competitively priced - the Funder or manufacturer takes the risk in the residual value of the equipment and factors this into the rental, bringing down the periodic cost to you. |
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Fixed maintenance contracts can also be built in to the monthly rental |
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Tax efficient - the rentals can normally be offset against taxable profits |
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Asset normally treated as 'off-balance sheet' (subject to your auditors' approval). |
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Flexible - at the end of the term, you can return the asset or extend the period. Either way, you do not carry the problem of disposal of the equipment.
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