Finance Lease

Unlike an operating lease, a finance lease offers some of the benefits of ownership. You rent the asset over a specified term at a fixed monthly rental that is adjusted to meet your cash flow needs, relative to an initial rental (deposit) and a final rental (balloon).

The lease can be extended indefinitely at a “peppercorn” rental. If the asset is returned at maturity, it is sold and the lessee usually enjoys the majority of the sales proceeds.

Finance leases are usually on balance sheet and the asset is leased for the majority or all of the assets economic life. Risks and rewards sit with the lessee. Leasing costs can usually be off set against taxable profits. VAT is charged on lease payments. 

All products are subject to status and individual lenders’ underwriting criteria.