Operating Lease

Operating Lease

Do you want to use latest office equipment which is out of your budget? An Operating Lease is a flexible rental agreement that allows you to acquire new and upgraded technological equipment with a payment schedule over a fixed term. At the end of the term, you can either return the equipment, or walk away owning it for a fraction of its price, or re-rent it.

Operating Lease

An Operating Lease, also known as Equipment Rental, is a kind of Rental Agreement which allows anyone to rent new technologies such as computers, telephones and other office equipment. This service exists to allow people to use upgraded technology, which often has a high-depreciation rate, and becomes obsolete fast. The finance company purchases the equipment and rents it to you with a repayment schedule over a fixed term. It is similar to a Finance Lease but allows greater flexibility.

If you want to update your existing contract (certain criteria applies) to acquire and upgrade to new technology, an Operating Lease can prove to be helpful. You can buy additional accessories to add to the equipment, and if required you may replace or upgrade it. You can choose to have maintenance software installation and other intangible items included in the agreement.

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How an Operating Lease works
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Term

The term of finance agreement can be from 1 - 5 years and must be in accordance to ATO Guidelines.

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Deposits

Deposits are not required. The full purchase price must be financed.

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Residual/Balloon

You must have a residual payment as the last payment of your finance agreement according to ATO Guidelines.

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Owner of the goods

You have possession and use of the equipment, however, the finance company shoulders most of the risk of ownership.

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Expiry of Rental Period

At the end of the Rental Period, you have a number of options:

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Accounting Benefits

Rental payments are 100% tax deductible because they are treated purely as an operating expense.

Other Options to Operating Lease

If you are considering an operating Lease you may also want to take a look at as other possible finance options.:

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