What is a finance lease?

A finance lease is a type of commercial lease in which the legal owner of the asset — in this case, a tractor — rents the asset to the user of the tractor for an agreed-upon period. When a lessee enters into this agreement, they have full operating control of the asset. They will have responsibility and assume the risks and rewards that come with owning the asset. For accounting purposes, the lease gives the lessee the same economic characteristics as if they had full ownership of the tractor. The lessee will record the asset as a fixed asset on their balance sheet. In this situation, the lessee will record the interest of the lease payment as an expense. The lesser charges rent in exchange for lending the asset. The lessor retains ownership of the asset but the lessee gains exclusive use of the asset (providing they abide by the terms of the lease). The lessee is obliged to make rental payments that cover the original cost of the asset. There is an obligation to pay all of the fixed rental amounts, sometimes including a percentage of the purchase price of the vehicle at the end of the contract.

What is an operating lease?

An operating lease in contrast is the simplest form of equipment leasing, where the customer doesn't take on the risks and rewards that come with owning the asset (such as maintenance costs). An operating lease or contract hire is a way of renting an asset for your business over a short or medium time frame without taking on any risk. With an operating lease, you can get a tractor hire over a fixed term, with lower monthly payments and without the commitment of ownership.

News

Funding Options selected for Upscale 4.0 high-growth cohort

24 Jan 2019

Funding Options is one of the 30 leading tech businesses revealed for the next stage of Tech Nation's prestigious programme, following a 'record number of exceptional applicants'.

fo x tech nation partnership news header

Tech Nation has announced the 30 businesses spearheading their programme to help tech scaleups reach the next level.

Funding Options is one of the 30 leading tech businesses revealed for the next stage of Tech Nation's prestigious programme, following a 'record number of exceptional applicants'.

The programme gives business founders the chance to meet other high-growth business leaders, take part in workshops and overcome the challenges of scaling up a tech business.

Funding Options has also been successful in previous Tech Nation programmes, having been selected for their Fintech programme and for the earlier stages of the Upscale programme.

In Upscale 4.0, we join other high-growth tech businesses such as Fluidly, Lending Crowd and Airsorted.

Forbes, Peer2Peer Finance News and Evening Standard have covered Tech Nation's announcement.

Courteney Way

Marketing Director

Courteney Way is the Marketing Director at Funding Options, raising the profile of the fast-growth fintech within the ecosystem and building brand awareness as a vital provider of finance solutions to SMEs. For the past ten years, she has worked across UK, European and South African markets and In 2022, she was recognised as part of Women in Fintech Powerlist.

Government Announces Recovery Loan Scheme Extension Funding options available to business owners in a post-RLS lending landscape National Beer Day 15th of June Liz Truss elected new Tory leader. Here are 5 things businesses can expect from the new Prime Minister.84% of businesses plan to apply for funding in 2023 – we find out why What does the 2023 Spring Budget mean for businesses?Funding Options’ 2021 Women in Finance Charter update HMRC's new VAT deferral payment scheme now open for registrations UK Government unveils SME Brexit support fund Chancellor sets out ambitious plans to boost UK Fintechs How to support your mental health at work Economic Secretary visits Funding Options

Subscribe to our newsletter today

E-mail address

I agree to the terms and privacy policy.

Legal

Get in touch

Disclaimer: Funding Options helps UK firms access business finance, working directly with businesses and their trusted advisors. We are a credit broker and do not provide loans ourselves. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. We are also able to make insurance introductions. Funding Options may receive a commission or finder’s fee for effecting such finance and insurance introductions.

*Eligibility criteria apply - see Tide website for full details.

Funding Options Ltd is incorporated and registered in England and Wales with company number 07739337 and registered office at 4th Floor The Featherstone Building, 66 City Road, London, EC1Y 2AL.

© Funding Options Ltd · Authorised and Regulated by the Financial Conduct Authority · Reference Number 727867

Business Loans

Sign up to Tide today

Funding Cloud

Funding Options: Advisors

We're hiring!

Business Loans Calculator

Funding Options selected for Upscale 4.0 high-growth cohort

Related Articles

Subscribe to our newsletter today