An operating lease is best if use, not ownership, of an asset is most important. An operating lease is typically categorized as having a larger end-of-lease purchase option and lower monthly lease payment that may benefit cash-flow-conscious buyers. An operating lease is considered an "off-balance sheet" obligation and permits the lessee to write off each remittance as an operating expense.
| 1. |
An operating lease is ideal when use, not ownership, of the equipment is important. |
| 2. |
Operating leases are off-balance-sheet transactions. |
| 3. |
Cash flow is typically enhanced through lower monthly lease payments. |
| 4. |
Operating leases typically have fair-market-value buyouts in which ownership is negotiated at the end of the lease. |
| 5. |
You are able to write off 100% of each monthly lease payment. |
