Operating Lease/ Rental

This option provides several advantages, particularly for public companies, schools and government bodies. An operating lease is a type of lease in which the financier retains ownership of the leased equipment. Under an operating lease there is no predetermined "residual" value to pay as ownership does not automatically pass to the customer at the end of the term.

Operating leases are not listed on the company's balance sheet. Being "off balance sheet" is considered a major advantage over finance leases, particularly for public companies, which may have borrowing restrictions.

By not having to list the operating lease on the balance sheet the company's debt to equity ratios are not adversely affected by using the equipment for a set period of time.

For high technology equipment, which usually becomes obsolete over the term of the lease, the risk of ownership is removed as the customer can hand back the equipment and upgrade.