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Operating
Lease
An Operating Lease (or
Lease Rental) is an agreement
between the
‘owner’ of the
equipment, the Lessor and the
‘user’, the
Lessee. All costs such as
equipment, hardware,
software, installation,
training, commissioning,
maintenance, services etc can
all be included in the
agreement. The lessee is
responsible for maintaining
and insuring the
equipment.
An Operating Lease is
typically structured between
1 and 5 years, which is
normally less than the
equipments’ useful
working life, with the
payments being fixed.
Payments can be made on a
monthly, quarterly or yearly
basis. Additional equipment
can also be ‘Added
on’ for an increase in
the monthly rental, or the
equipment may be exchanged or
upgraded under the Technology
Refresh option.
Operating Lease rentals
are often lower than Finance
Lease rentals as you are
contracted to return the
equipment to the Lessor at
the end of the lease
term.
An Operating Lease may be
treated as ‘off balance
sheet’ whereby no asset
or liability is recorded on
your balance sheet. The
rentals payments made are
charged to the Profit and
Loss Account
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iLease
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