This form of leasing is the commonest way of financing business assets. Because the asset is shown (capitalised) on your balance sheet, this variant is also called ‘on-balance-sheet leasing’. You have use but are not the beneficial owner of the asset.
At the end of your contract, the asset is either sold to an independent third party or sold via a sales agency for a fixed amount.
The advantages of finance leases:
- You have the ability to finance unique business assets
- Financing of equipment until the end of its useful life
- Monthly charges that you can see clearly
- You have the option to finance the equipment 100%
- Your working capital is unaffected
- New and expensive equipment is within immediate reach