An Operating Lease, also know as a fair market value lease, allows businesses to essentially “rent” equipment with off-balance sheet financing.

Benefits of an operating lease:

• Little or no down payment required – no large initial outlay of cash
• Conserves working capital
• Allows companies to better manage budgeting cycle
• Can bundle multiple lease items – hardware, software, and services, for example
• No impact on current bank covenants
• Off Balance Sheet financing
• Deduct entire lease payment as operating expense
• Provides protection from fair market value fluctuations on most equipment
• Allows technology refresh – lessee may choose to swap the asset for one of newer technology
• Faster approval than with typical bank loan
• Faster appropriation from operating budgets
• Master Lease Agreements make follow on transactions much easier
• Flexibility at end of lease term