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FAQ: Operating Lease

What is an Operating Lease with ownership?

An operating lease is a RENT-TO-OWN contract for the use of equipment over a fixed term. Product does not reflect in client`s asset register during term.

What is the interest rate?

Premium is calculated according to a fixed rental therefore no interest rate is quoted.

What is the value of product at the end of term?

The value of the product is determined by dealership that does trade-in, full value of product belongs to the client.

What is the benefit of 0% Deposit?

Creates cash-flow, opportunity cost of capital is important for any business.

How does a VAT payment work?

VAT is payable monthly on invoice, creating a better VAT claim over term.

What are the Premium Terms?

Premiums are payable monthly or quarterly, can be in advance or arrears depending on the client.

What are the TAX Benefits?

Premiums are 100% TAX DEDUCTIBLE as an Operating Expense over term.

Can I settle anytime?

Yes, settlement can be requested and will be calculated according to outstanding term.

Who Pays Insurance and Maintenance?

The client pays as per normal conditions for hire purchase.

Why an Operating Lease rather than Hire Purchase?

An operating lease does not affect your balance sheet`s debt ratio, which means it has no impact on your other facilities such as over draft, production loans or bonds , it is Off Balance Sheet Funding.

The above information has been obtained from a finance broker and is for informational purposes only. FGW Generators accepts no liability for any reliance on the above. Please liaise with a qualified tax advisor for confirmation of the above points.

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