Operating Lease
Operating Lease is a rental-style finance arrangement where a business uses an asset for a set term without taking ownership. At the end of the lease, the business typically returns the asset, upgrades, or renews the lease. It is commonly used for vehicles, medical equipment, and tech equipment with short lifespans.
Why It Matters
Operating Leases help businesses stay updated with newer vehicles or equipment while avoiding long-term ownership costs. It's widely used in industries that upgrade frequently, such as medical clinics, cafés, trades, and logistics. It integrates naturally with the Business Owners Finance Hub, and complements Equipment Finance and Vehicle Finance.
How It Works
- The lender buys the asset.
- Your business leases it for a fixed term.
- You return, upgrade, or re-lease the asset at the end.
- No residual value or ownership transfer is required.
Compare to Finance Lease: Lease vs Buy Equipment.
Common Use Cases
- Clinics upgrading medical devices regularly
- Cafés replacing machines every few years
- Transport fleets wanting frequent vehicle refreshes
- Tech-heavy businesses replacing laptops, POS, and servers
Related Switchboard Resources
ATO leasing guidance: ato.gov.au.
Do I own the asset at the end of an Operating Lease?
No — Operating Leases do not transfer ownership.
Is an Operating Lease tax-deductible?
Usually yes, but confirm via the ATO website or your accountant.
Can I upgrade early?
Many Operating Leases allow mid-term upgrades depending on the lender.