Introduction to rental agreement / operating lease
An Operating Lease allows the customer to make use of equipment without the burdens of owning the equipment. The lease is usually structured over less than the useful life of the equipment. Unlike a Chattel Mortgage, CHP or Finance Lease the title of the equipment does not transfer to the customer at the end of the finance term.
If the customer wishes to own the equipment at the end of the term the financier may offer the customer a payout amount based on fair market value. Often an Operating Lease is used to lease technology equipment such as computers, printers, copiers and security equipment .
A business will use the lease to refresh equipment to ensure an adequate level of technology within the business to run the business. Usually it remains the customer’s responsibility to maintain, service and keep the equipment being leased in good working order.
What are the benefits of an Operating Lease?
- Return or Upgrade equipment at the end of the finance term without the costs of having to dispose of the old equipment
- Improved the company balance sheet as leased equipment is “off balance sheet”. The repayments become current expenses noted on the Profit and Loss Statement
- Repayments are 100% tax deductible – this means a reduced Total Cost of Ownership of the equipment
- Avoid capital expenditure as equipment can be leased as an operating expense
Do you have questions about rental agreement? Then call 1300 21 22 23 or Contact Us.
What are the additional benefits of a Relion Finance Operating Lease?
- Enjoy flexible finance terms ranging from 1 – 6 years (depending on the asset type). You may continue to lease the equipment beyond the initial term of the lease.
- Added security and peace of mind knowing all our Operating Leases are fully compliant to ATO guidelines
- Repayments are often cheaper than a Chattel Mortgage, CHP or Finance Lease
- We offer a fixed rate term for the life of the loan assisting you when budgeting
- We will negotiate on your behalf a reduced rental with the financier for further fixed term
- The full invoice amount including the GST can be financed
- Bundling of equipment such as cabling, software, hardware and licenses is possible
The information provided by Relion Finance is not financial advice. We provide information of a general nature only. If you require information specific to your situation please consult with your Accountant or Financial Planner.
