Our Operating Lease brokerage services help UK businesses find the right asset lender for one-off, short-term asset requirements. Fast decisions, affordable monthly repayments.
Operating Lease – Lease Assets As and When Your Business Needs Them
The world of business is full of uncertainties. With these, however, spring opportunities as well. Businesses that manage to make the most of these opportunities while minimising the adverse impacts of uncertainties succeed by outpacing the competition.
If your business comes across a growth opportunity, you can rarely afford to let it pass. If such opportunities need you to acquire newer equipment, more cutting-edge technology or a niche vehicle, Operating Lease can be the most promising way of tackling your financing problems.
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What is an Operating Lease?
An Operating Lease is quite similar to Finance Lease in that both leases enable you to ‘rent’ the asset over a period of time. The key difference between the two is the length of the contract.
While Finance Lease contracts typically stretch over months – years, in some cases – Operating Lease contracts usually conclude within weeks.
Operating Leases – Who are they for?
An Operating Lease is an ideal mode of Asset Finance for businesses that require the services of an asset for a short length of time. Perhaps, a practical example can better explain this need.
Let’s consider the example of a small waste management business. The business, operating in a mid-sized town, has just enough resources to operate at the maximum capacity. However, it manages to secure an important contract to dispose industrial waste in a nearby factory. The business owner feels that they could speed up the entire process by supplementing their resources with 10 site-dumpers. The business can neither afford nor need to purchase these assets. So, the owner decides to draw an Operating Lease to rent the vehicles for a 14-day period. At no significant cost, the business manages to use the fleet of site-dumpers and successfully complete the project.
Benefits of an Operating Lease
A well-negotiated Operating Lease can bring numerous advantages to the borrowing business. Some of these are discussed below.
No Significant Outlays
Operating Leases allow the business to use the asset without any significant outlays. The daily or weekly basis rentals cover the cost of the asset. This is an immensely important advantage to have for businesses that can’t afford to divert any cashflow towards new assets.
In addition, we negotiate on your behalf with the lessor on your behalf to optimise the residual asset value. This can further lower the rentals.
It is possible to fine-tune your Operating Lease contract so as to match your requirements. Since such contracts are active for shorter periods of time, you can extend or prematurely terminate the lease should you require to.
The Asset Remains Off-balance Sheet
This is the defining feature of Operating Lease Asset Finance. Unlike other types of Asset Finance, assets acquired through an Operating Lease need not appear on your balance sheet. The rentals for the asset come directly from the operational profit and loss accounts of the borrower.
Operating Lease – Who is Responsible for the Asset?
Since Operating Leases work on the same lines as Finance Leases, the responsibility of the asset usually lies on the lessee. This includes the safety, insurance and maintenance of the asset. However, it is indeed possible to negotiate these terms with the lessor.
At the conclusion of the lease term, the lessor repossesses the asset.
Maximise the Operating Lease Rewards with Commercial Finance Network
If your business is in need of an asset for a one-off use, an Operating Lease can certainly be an option worth exploring. It is not, however, always easy to secure such a contract. Most high-street lenders do not have the resources to offer such financing products. Therefore, it’s vital that you work with experienced, responsible and specialist lenders.
Having worked in the UK Asset Finance industry for over a decade, we have all it takes to help your Operating Lease application reach the most suitable and best placed lenders. High approval rate, industry-leading customer service and fair contracts are some of the hallmarks of our Asset Finance services that have helped many businesses like yours extract the best value out of assets.
Contact us today to discuss your requirements with one of our Asset Finance Experts and know more about how our Operating Lease services can help your business!