Operating leasing (Renting): What is it and what is it for?

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You need machinery or equipment for your company and you don't know how to buy it? The loperating easing or renting, is one of the easiest and most effective ways to get those goods you need for you or your company. If you don't know what this financial instrument implies, keep reading and learn everything you need to know about it. renting. 

What is operating leasing?

 He operating leasing, also known as renting, is a financial tool based on the leasing of movable property for anyone who needs to use it (whether individual or company). 

The basic purpose of operating leasing is enter into a movable property lease (be it a car, industrial machinery, gardening machinery...) through the payment of a series of fixed fees imposed by the lessor during a certain period of time. The big difference that this instrument has with the financial leasing the thing is You cannot opt for the final purchase of the product. Once the contract is finished, the property must be returned. 

One of the great advantages of resorting to an operational leasing contract is enjoying a full coverage in terms of maintenance of the leased propertyeither. The financial institution will be responsible for all the costs of maintenance and/or repair of the product as long as said expenses have not been incurred due to misuse of the same. It is one of the star resources for SMEs that need to acquire equipment to continue with their financial activity. 

Characteristics of operating leasing or renting

In this section we are going to tell you about the most interesting characteristics of an operational leasing contract, so that you can decide with criteria if it is the solution you really need: 

  • The duration of the contract is established between 2 and 5 years. Once this is finished, the leased property must be returned. A very common mistake in these cases is to sign a contract with a duration greater than the life cycle of the product. It is important to study the useful life of the asset before signing anything, since it is not interesting to keep paying for a product that will end up becoming obsolete and can cause many problems.
  • The financial entity who rents the product, assumes the cost of maintenance and repair of the product, as long as they have not been given due to misuse of it (as we mentioned before). In the event that a vehicle is rented, it will also be responsible for the insurance costs and revisions of the same. 
  • Resorting to operating leasing can be a great advantage in tax matters. As the leased property is not listed as a possession of the company or the person, greater liquidity is obtained and greater borrowing capacity is acquired in the case in which it is necessary to resort to it. 
  • The interest resulting from this contract is usually much lower. As it is a contract directly with the manufacturer of the product or the importer, the liberation of intermediaries allows us to offer a much more affordable interest rate.
  • This is a contract not limited to companies. Any individual can benefit from a financial tool of this type, which offers a multitude of advantages, whether for a large company, an SME or an individual. 

Alter Finance, experts in operating leasing financing

Operating leasing is one of the most useful financial tools for those people or companies that need to have a product and do not have the economic capacity to acquire it and enjoy it as their property. 

To enjoy a good operating lease contract, it is important in the first place study well the use and duration of the product so as not to make mistakes in the stipulation of the longevity of the contract. You should also study the solvency of the client and agree on the amount and frequency of payments that are going to be done.

If you need information on the steps to get your operating lease contract, or want to start immediately, at Alter Finance we are experts in non-bank financing and we can help you in this task. Contact us without obligation.

 

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