Operating Lease Finance

Operating lease is a contract where a financier buys energy efficiency equipment for a business to hire and use.

Stay in control of your finances

  • Get financing of more than $7500.
  • Low monthly repayments over a long period.
  • No upfront cost or security.
  • Simple 1–5-year contract with a 1–3-month agreement period.

Potential tax benefits

  • You may be able to claim tax on the interest.
  • You can’t claim tax on depreciation.
  • On the balance sheet (since January 2019).

You don’t own the equipment

  • Once the finance agreement ends, you can easily upgrade the equipment.
  • A good way to see if the equipment is right for your business without investing.

How it works

  1. Find a financier who offers operating lease financing. Most major banks offer it, so your bank is a good place to start.
  2. The financier purchases the equipment for you.
  3. You make monthly payments to the financier.
  4. At the end of the agreement, you can extend the lease, pay market value or return the equipment.

You own the risk, but for an extra cost, the financier may take on the risk for you.

It’s advised to always seek advice from your accountant.

For a list of simple tips to save energy in your business, visit the Victorian Energy Saver website.

Want to know more? Get in touch with:

Vivek Kotak

Sustainable Finance Lead

+61 3 8626 8781

vivek.kotak@sustainability.vic.gov.au

Correct as at January 2018.

Sustainability Victoria
Level 28, Urban Workshop,
50 Lonsdale Street, Melbourne VIC 3000
Phone (03) 8626 8700
sustainability.vic.gov.au
Published by Sustainability Victoria.
Sustainable Finance – Operating Lease
© Sustainability Victoria January 2018

Disclaimer: The information provided in this document is general advice only. It does not take into account your particular needs or objectives and does not constitute legal or accounting advice. Accordingly, any comments or statements made are not a recommendation that a particular course of action is suitable for you and you need to seek your own legal, tax and accounting advice in relation to your specific circumstances.

This information is true and correct as of January 2018