Operating Lease

A flexible operating lease from CHG-MERIDIAN UK allows for the use of an asset, but the lease term is short compared to the useful life of the asset/business equipment.

What is an operating lease?

An operating lease (also known as a fair market value lease) enables our customers to replace and upgrade their business and IT equipment without the risk of it losing its value or becoming obsolete. An operating lease allows for the use of an asset, but the lease term is short compared to the useful life of the asset. As a result, we take a residual value on the asset meaning the sum of the rentals will be typically less than the original capital cost. 

At the end of the lease you can either:

  • Hand the equipment back and upgrade to the latest technology
  • Extend the lease period for continued use of the current equipment

What assets are typically funded via an operating lease?

  • Laptops
  • Tablets
  • Mobile phones
  • Ultrasounds
  • X-Ray machines
  • Infusion pumps

advantages of leasing IT assets & equipment

  • The sum of the rentals within an operating lease will typically be less than the original capital cost
  • Usually results in the lowest payment of any financing alternative and is an excellent strategy for capital budgeting constraints
  • Provides fixed known costs throughout the contract period
  • Flexibility to upgrade to new equipment as required or to terminate the agreement early
  • The option to hand the equipment back at the end of the term or to continue to use it for a secondary period
  • Fixed payments - improve budgetary and planning certainty

Example Operating Lease

New equipment cost: £50,000
Term: 3 years
Rental profile: Quarterly
Rental: £4,000
Total payable: £48,000

Download operating lease whitepaper

Financial Models Brochure Front Cover

Flexible finance models for your IT equipment (1mb)

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We'd love to hear from you! If you have any questions feel free to get in touch with us directly or fill in our short form below.

Simon Young

Vice President Sales UK/Ireland

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