Paying cash for an asset can be a significant drain on your working capital. Leasing the asset, however, gives you access to the asset without paying for it all at once.
All forms of leasing are basically rental agreements giving you (the lessee) the right to use an asset owned by the lessor (finance company) for a specific period of time in return for regular payments (rental payments).
You can lease almost anything, from equipment valued at a few thousand pounds to assets worth millions.
Leasing contracts are flexible and can be tailored to your needs.
When leasing, consider its effects on accounting, reporting, tax, and your cash flow. This section will give you a general overview. It does not replace professional advice
You may wish to consult your accounting and tax advisors before finalising a lease transaction to reap the maximum benefit and avoid complications.
How leasing works
There are many types of leasing but, fundamentally, all fit one of two categories: