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Operating Lease

Supplier: Finlease (Australia)

Use it, then hand it back.

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This is basically a rental agreement. The financier owns the equipment and you pay a regular payment to use it. At the end of the term of the Operating Lease, simply return the vehicle or equipment with no residual or balloon payment.

Expenses like servicing are the responsibility of the financier. So you’ll always have the equipment or vehicle in peak operating condition.

Advantages and applications
With an Operating Lease means you have the use of a vehicle or equipment, without impacting on your company’s working capital.

There is also no risk to you of losing money through a greatly reduced resale value, as you do not actually own anything.

An Operating Lease can also help with budgeting because you know your commitments from one month to the next.

  • Manufacturing machinery and plant.
  • Cars, trucks and commercial vehicles.
  • Earthmoving and construction equipment.
  • Aircraft or helicopter.

Tax benefits
When the item is first acquired, the GST is paid by the financier who pays the input tax credit. As the use of the vehcile or equipment, you also claim the GST on the monthly installments with each BAS return.

You can claim the entire monthly payment as a tax deduction with an Operating Lease if the vehicle is used solely for taxable income producing activities.

Please note that Finlease service Australian customers only.

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