Operating lease is the right choice for anyone who wishes to use an item only for a certain period, plans the regular replacement of fixed assets or needs equipment solely to perform a particular contract. When the contract expires, they return the lease item and generally immediately replace it with a new one, although they also have the option to purchase it or renew the contract. Servicing and risks associated with the operation of the lease item are always subject to individual agreement.
How you benefit:
- No constraints on your liquidity
- SGEF purchases the asset, so your own resources and lines of credit are not affected.
- Repayment from the return on your investment
- You only start paying instalments after taking receipt of the lease item, i.e. repayments are sourced from revenues generated by the use of the asset.
- Operating lease doesn´t increase the share of credit facilities in your balance sheet
- The asset owner is SGEF, which accounts for depreciation and includes the lease item in its own balance sheet. For your accounting purposes, lease instalments only figure in your profit and loss account.
- You take receipt of a new piece of machinery or a new vehicle, and return a used one
- You do not need to worry about selling or finding another use for the asset, and you can always be sure of the latest technology and equipment in the performance of your contracts.
- Simple cash-flow planning
- Lease payments are fixed and easy to predict.