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Leasing enables a business to acquire the use of assets such as plant and machinery without having to pay large sums of money for ownership of the equipment, initially. Instead a business simply leases the equipment from a leasing company who retain ownership. There are two main forms of lease in the UK, an Operating Lease, in which the company pays for use of the equipment for a set period of time after which it is returned to the leasing company, or a Finance Lease, where at the end of the lease period there is the option to purchase the equipment outright for a further nominal amount.
Whilst leasing does not inject money directly into the business, and in the long term usually costs more than buying the equipment outright, in cash flow terms its an effective method of a business getting the equipment it needs when its cash flow is tight. There are many examples of companies that offer leasing services to businesses, one example is the leasing-network, whose site also includes a neat little lease calculator.
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