Operating Lease

Effective for high value, assets and vehicles. The Lessor builds in a residual value to reduce the rentals, thus helping cash flow and making ‘off-balance sheet’ funding possible.

Features and benefits

  • A finance house or a 3rd party (but not the customer) bears the residual risk on the equipment’s value.
  • Rentals can be set according to your cash flow – especially beneficial if your business is seasonal.
  • Rentals can normally be offset against taxable profit.
  • Asset normally treated as ‘off-balance sheet’ (subject to your auditors’ approval).


Typical assets:

Cars, commercial vehicles, plant and machinery, buses and coaches – in fact any asset where Lombard can support an appropriate residual value.

Frequently Asked Questions

Can this type of lease be ‘off balance sheet’?

Yes, subject to confirmation by your auditors, you have the option to classify your lease as ‘off balance sheet’.

Can I claim any tax allowances?

As owners, the Lessor claims the appropriate writing down allowances and these are reflected in the rentals you pay. You should be able to offset your rentals against taxable profits, normally over the same period as your agreed depreciation policy. If in doubt, consult your auditors.

Can I claim the VAT charged on the rentals?

Providing you are registered for VAT, you can normally claim the VAT payable on the rentals for commercial vehicles.

Who is responsible for servicing and repair?

Unless you have servicing and maintenance built into your agreement, you are responsible for maintaining the asset in good condition. If you fit any replacement or additional parts to the asset, they become the property of the finance house.

What happens at the end of the agreement?

It will depend on the type of Operating Lease you have. You should consult usjust before the end of the period of hire; we would be delighted to discuss the options open to you.


Gable Asset Finance is business finance brokerage specialising in asset and equipment finance. We offer confidential and non-judgemental advice on business finance options. We work with businesses of all sizes and commercial sectors finance assets, machinery and equipment. We have found asset, machinery, vehicle and equipment facilities for hundreds of businesses and remain in contact with all our clients.


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