Particularly effective for specialised assets and vehicles of higher value. The Lending company builds in a residual value to reduce the rentals, thus helping cash flow and making 'off-balance sheet' funding possible. Key features and benefits • The lease company bears the residual risk on the equipment's value. • Rentals can be set according to your cash flow - especially beneficial if your business is seasonal. • Rentals can normally be offset against taxable profit*. • Asset normally treated as 'off-balance sheet' (subject to your auditors' approval). • Fixed or variable interest rate - you make your own assessment and choose accordingly. * special rules apply to company cars.

FREQUENTLY ASKED QUESTIONS ABOUT OPERATING LEASES
Can this type of lease be 'off balance sheet'?
Yes, subject to confirmation by your auditors, you have the option to classify your lease as 'off balance sheet'.

Can I claim any tax allowances?
As owners, the lending company claims the appropriate writing down allowances and these are reflected in the rentals you pay. You should be able to offset your rentals against taxable profits, normally over the same period as your agreed depreciation policy. If in doubt, consult your auditors.

Can I claim the VAT charged on the rentals?
Providing you are registered for VAT, you can normally claim the VAT payable on the rentals. Special rules apply to company cars.

What if the asset is lost, stolen, damaged or destroyed or becomes subject to a total loss claim during the period of the lease?
You are responsible for the asset and for any outstanding balance on the agreement. Comprehensive insurance, covering at least the full replacement cost of the asset, is therefore vital.

Who is responsible for servicing and repair?
Unless you have servicing and maintenance built into your agreement, you are responsible for maintaining the asset in good condition. If you fit any replacement or additional parts to the asset, they become the property of the lending company.

What happens at the end of the agreement?
It will depend on the type of Operating Lease you have. You should consult our Customer Service centre just before the end of the period of hire; we would be delighted to discuss the options open to you.