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Operating Lease
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What is an Operating Lease?
An operating lease provides businesses with access to essential assets without the burden of ownership. Through regular payments, your business gains the privilege of using the asset, while the leasing company retains ownership.
Operating leases are ideal for short-term, low-value assets like laptops or IT equipment, offering the flexibility to upgrade or re-lease the asset at the end of the lease, which is not available with a finance lease.
How Operating Leases Work?
With an operating lease, your business pays for ongoing access to the asset. Unlike traditional asset acquisition methods such as business loans, operating leases offer the advantage of frequently upgrading the equipment within the lease period.
This proves particularly advantageous for assets like IT equipment, which tend to become obsolete within a few years.
Key Aspects of Operating Leases:
- Cost-effective financing for short-lived assets.
- The business cannot sell or modify the asset without the lessor’s permission.
- Upon lease expiration, the terms become void, often necessitating renegotiation for a new lease with updated terms.
- Generally, lease payments are tax-deductible.
- Depreciation on the asset is not claimable during the lease.
- No guarantee of ownership or option to purchase at the lease’s end.
- May incur higher costs if maintenance and servicing are included in repayments.
Explore New Possibilities with
AFH Operating Lease
Why Choose AFH for Your Operating Lease?
AFH offers a diverse range of tailored operating lease solutions to help drive your business forward, whether you're expanding your fleet, upgrading equipment, or acquiring essential assets.
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Extensive Range of Loan Options
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Personalized Service
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Competitive Interest Rates
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Streamlined Application Process
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Efficient Process
AFH prioritizes your convenience with a fast and straightforward operating lease application process, guided by our streamlined procedures and expert support.
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Swift Response
AFH ensures a timely response and efficient processing of your operating lease application, minimizing waiting times and enabling you to progress swiftly with your business plans.
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Competitive Rates
At AFH, we ensure maximum savings and financial benefits by securing competitive rates and terms through our extensive network of lenders.
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Tailored Support
Our experienced team provides personalized advice and solutions, analyzing your unique business needs and financial circumstances to help you make informed decisions.
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Commitment Plus
AFH ensures exceptional service, addressing your needs, providing updates, and supporting you at every step for peace of mind and confidence in your operating lease journey.
Operating Lease vs. Finance Lease
The primary difference between an operating lease and a finance lease lies in what happens at the end of the lease term. With a finance lease, you usually have the option to make a final residual payment and acquire ownership of the asset. In contrast, an operating lease does not offer ownership.
At the end of the operating lease, you have the choice to return the asset to the lessor or renew the lease for a new term.
Whichever option you choose, a lender will purchase the asset on your behalf and then rent it to you in exchange for regular payments. In most cases, you can claim a tax deduction for your lease payments.
However, operating and finance leases differ in terms of what the lease payments cover. Finance lease payments only encompass the asset itself (allowing you to build equity in the asset), while operating lease payments include usage, maintenance, and operating costs.
Operating leases may have slightly higher repayments to account for servicing and maintenance.
Utilizing an Operating Lease for Your Business
Operating leases are commonly employed for assets that may quickly become obsolete, such as computers and IT equipment. They are also ideal when it is more advantageous to regularly upgrade the equipment rather than owning it outright.
By opting for an operating lease, your business can include all costs for asset rental in regular repayments, providing certainty in case of malfunctions or repairs and ensuring accurate repayment forecasts. Experience the benefits of operating leases with AFH, your trusted partner in commercial finance solutions. Contact us today to explore your options and elevate your business efficiency.
Apply for Your Operating Lease Today
Empower your business with AFH Operating Lease. Our dedicated team of Relationship Managers is ready to assist you in finding the right leasing solution for your equipment needs. With our expertise, access to multiple lenders, personalized approach, and streamlined processes, we are committed to making your Operating Lease experience a success.
Contact AFH today to discuss your business's equipment financing needs and take the first step towards reaching new heights. Let us be your trusted partner on this exciting journey.
