We understand that a lease and can provided significant tax advantages when making major purchases. We can assist you by finding the right type of lease that will meet you business goals and cash flow requirements.

When you decide to lease equipment, there are many types of leases from which can choose including single contract and master leases. The most common types of leases are operating leases and finance leases.

Operating Lease

An operating lease is particularly attractive to companies that continually update or replace equipment. They want to use equipment without ownership, but also want to return equipment at lease-end and avoid technological obsolescence. An operating lease usually results in the lowest payment of any financing alternative and is an excellent strategy for bypassing capital budgeting restraints. It typically qualifies for off-balance sheet treatment and can result in improved Return On Asset (ROA) due to a lower asset base. It can also result in higher reported earnings in the early years of the lease.

Finance Lease

A finance lease is a full-payout, non cancelable agreement, in which the lessee is responsible for maintenance, taxes and insurance. Finance leases are most attractive in cases where the lessee wants the tax benefits of ownership or expects the equipment's residual value to be high. These leases are structured as equipment financing agreements with residuals up to 10 percent. The lessee purchases the equipment upon lease termination at a pre-agreed amount. The term of a finance lease tends to be longer, nearly covering the useful life of the equipment.

To find out more about these two types of leases, call us now on 1300 653 846 or email info@greenloans.com.au.