An operating lease is the straightest forward of the two. The lessee (the organization) makes an agreement with the lessor (seller of the asset) for the use of an asset. Basically the organization is renting the asset with an installment payment (which usually includes interest) with intentions to return the asset when the lease ends. An example of an asset that would be commonly financed with an operating lease is new technology. Because technology is going to change, it is often better to lease the asset rather than commit large sums of an origination’s capital to an asset that is going to need to be upgraded every couple of years. The accounting for operating leases is quite simple. Because an organization does not own the asset, it is not recorded on the firm’s balance sheet. The only effect that an operating lease has on organization’s financial statements is the lease payments will appear as an operating expense on the entity’s income statement. Since an operating lease is not recorded on the balance sheet, it is sometimes referred to as off balance sheet financing. The main advantage of an operating lease is that the organization can use the asset without the usual attributes of ownership (i.e. the liability that would come with financing an asset and the depreciation expense that would come with an owned asset). Another advantage of an operating lease is that since it is not treated as a liability the organization will maintain their current access to capital. That is because the lease payments are not treated as debt and this helps the organization to maintain their current debt capacity. Thus the organization is able to use the asset to produce revenue, and is able to maintain its current access to the capital markets through debt.

When leasing an asset, most originations would like to keep any leases off their balance sheet, and not show an asset or a liability for the financing of assets (with would occur in ownership of an asset that is traditionally financed). With this in mind the Financial Accounting Standards Board (FASB) in 1976 issued Statement of Financial Accounting Standards No. 13 which basically stated that a lease agreement would be considered a capital lease if it meets any one of the following criteria:

1) If the lease life exceeds 75% of the life of an asset
2) If the lessee is to purchase the asset for a bargain price at the end of the lease (usually $1)
3) If there is a transfer of the ownership of the asset at the end of the lease
4) If the present value of the lease payments exceeds 90% of the fair market value of the asset

If the lease is considered a capital lease then the asset being leased will show up on the entity’s balance sheet. The leased asset will be represented as if the organization owned the asset, and all of the lease payments over the life of the lease would be accounted for as if they were a liability of the organization (by an amount equal to the present value of the minimum lease payments). Basically the asset financed as a capital lease would show up on the organizations balance sheet as if they had borrowed the money to purchase the asset; thus negating any advantages of the operating lease which keeps the asset and the liability off the organization’s balance sheet. The asset would also be depreciated like any other asset that the organization owned out right. The lease payment for a capital lease would flow to the firm’s income statement as an expense which would have two components. One of the components of the lease payment would be the interest portion which would be shown as an expense on the organizations income statement. The Second component is the principal payment which would also show up as an expense on a firm’s income statement.

As you can see both of these lease types are accounted for in very different ways which each in turn will affect an organization’s financial statements in different ways. These effects need to be considered when an organization makes its decision to use a lease as its vehicle to finance assets. Investors and Creditors of an organization must also take into account what kind of leases a firm is engaged in. If you were to look at an organization’s balance sheet in deciding if you should invest money or loan money to an entity, the firm could have several operating leases that would not show up on this statement. If the firm is over loaded with operating leases this could change the mind of an individual/institution that might want to invest money in the organization or loan money to the organization. This also comes into play when firms are being rated by the different rating agencies. Even though the firm’s balance sheet shows that they have very little debt it becomes more important to know how much the firm has financed assets using operating leases; which in essence could take a company that looks very credit worthy based on their balance sheet but in reality they have more debt than they can handle. Given this problem it could be a very short time until the benefits of an operating lease are taken away, and all leases are treated as capital leases.

You may be wondering what the difference is between the two but, feel a little embarrassed having to ask that question when you’re on the verge of entering into a contract with a leasing company. Still, it would be difficult to know how to answer if you don’t ask. It can also be very frustrating unless you understand what you’re actually being asked.

Fortunately, it’s not as complicated as it may sound because some of the leasing terminology can get a little confusing. Once you know what the terms mean, it will be easy to answer any question you’re asked. The main reason this question gets confusing is because in essence, the PCH is simply a type of leasing option. Therefore, if you’re asked, do you want to choose a lease or a Personal Contract Hire, you’ll basically being asked which type of leasing contract would you like to take out.

Individuals have a choice between the PCH and the PCP, which is Personal Contract Purchase. The two are very similar with the main difference being that, you have the option of buying the vehicle at the end of your leasing agreement when you choose the PCP. You’ll have low monthly payments and fixed monthly rates along with several other packages to choose from with both options. Take some time to review both the PCH and the PCP before heading out to lease your vehicle.

When making your decision between the two, it would be easier to choose if you consider what your long term goals are. For example, what do you plan to do at the end of your leasing term? Will you lease another vehicle? Will you consider buying a vehicle? Do you think you might would want to purchase the car that you’re leasing when the contract ends? The answer to these questions will help you decide between PCP and PCH.

A few other things that you may want to consider is how long you plan to lease the vehicle, what extra services will you need and exactly what your budget will allow for leasing a car. The more prepared you are when you walk into the leasing company the better off you’ll be. You’ll already know if the Personal Contract Hire option is right for you and you’ll be ready to make a deal.

Visit Fulton Leasing for more information on Personal Contract Hire and the other options that are available.

In order to determine how long you should lease your next Ford, you need to ask yourself a few questions. Start by taking a good look at your financial situation. How long can you really afford to lease the vehicle? Normally, a shorter lease means lower payments because the vehicle will not depreciate in value as much in one year as it will in two or three. Since the overall cost of the leasing agreement is partly determined by the depreciating value, this is an important question.

The next thing to ask yourself is what do you plan to do at the end of the leasing contract? If you give the vehicle back, you’ll be without transportation unless you have already made other arrangements. Of course, you could always opt to purchase the Ford that you’re leasing or lease another one. Nevertheless, this is something that you need to consider before you lease the vehicle. Otherwise, you may find yourself trying to figure out what to do at the end of the lease. Plus, it will give you an idea of how long you actually need the leased vehicle.

You also have to consider other things such as, how long the warranty runs and what type of maintenance package you plan to take out. The older the vehicle becomes the more likely it will be that you’ll start having maintenance problems. You want to make sure that you are fully covered for the duration of the contract. It’s never a good idea to lease a vehicle for longer than the manufactures warranty will run so, this is something else that you need to find out and use as a guide.

In the end, only you can decide how long to lease your next Ford but asking yourself these questions can make it easier to decide. If you go into the leasing company with no idea of what you want or what you plan to do, it could end up causing problems later or costing you more money than you wish to spend. Be prepared and your Ford car leasing experience should go smoothly and you’ll be able to decide how long to lease your Ford without any difficultly.

Visit Fulton Leasing today to learn more about Ford car leasing and to see a variety of different makes and models that are available.

Most everyone is familiar with buying a vehicle and the process that it requires so you most likely already know what benefits it has to offer. On the other hand, leasing vans is a fairly new concept and not everyone knows what great benefits it can provide. Therefore, some of these are listed below:

· You have the option of driving a new van every few years.

· The monthly payments are usually lower than what you’ll pay when buying.

· Vans don’t depreciate as quickly as cars so, this makes it possible for you to pay a low upfront cost.

· There are different leasing options available making it possible to choose one that is well suited for your needs.

· You don’t have to worry about taking care of any major maintenance issues because you can take out a package that will cover this for you.

· Many leasing options will allow you to buy the van at the end of the lease.

· You get to choose how long you want to lease the van. The average time ranges between two to three years but you can choose to lease for a shorter period of time or a longer one if you prefer.

As you can see there are many great reasons why it could be better for you to lease a van instead of buying one. However, if you don’t like making changes or if you enjoy adding a personal touch to your vehicle, then buying may be a better option for you. This is why only you can decide which option would suit your needs the best.

So, when you’re faced with the decision of deciding whether or not you should buy or lease a van, take a look at the benefits leasing has to offer and the advantages that buying can provide. Your decision will be based on which one provides the most benefits that will suit your individual needs the best.

If you decide leasing is the best option for you, then take a little time to invest in choosing a good leasing company that you can depend on. You can compare a few different ones to see what options they have to offer, what discounts they have available and which one can offer you the van of your choice for less while still providing excellent service.

When you lease a van from the right leasing company, you can rest assured that you’ll have a great leasing experience. This means that you can concentrate more on enjoying your van instead of worrying about whether or not you got a good deal.

If you like the benefits that you can receive when you lease a van, you can visit http://www.fultonleasing.co.uk/van-leasing.html to learn more about your selections and leasing options.

1. Maintain Capital Strength
2. Efficiency
3. Flexibility
4. Obsolescence Protection
5. 100% Financing
6. Customized solutions
7. Asset Management
8. Tax Advantages

When you are leasing equipment for your business such as computers, heavy construction equipment, used medical equipment or and farm equipments, you may qualify for benefits that you may not have known existed.

About The Equipment Lease Calculator

As a business lessee, you probably want to know approximately what you can expect to pay for an equipment lease. Here’s an equipment lease calculator that will give you fast answers to your financial questions. Simply enter the cost of the equipment that you are looking to finance and analyze quotes for 12, 24, 36, 48, or 60 months. Determine if a lease fits your priorities, long term goals and financial condition, all with a few clicks of your mouse. It’s easier than ever to determine the amount and length of lease that’s right for you.

The results returned by the leasing calculator are monthly rentals based on conservative equipment leasing rates for assets .Some sub-prime business customers may find that the deposit required is greater than the leasing calculator returned, i.e. 12 months rental instead of 6 is needed. Leasing companies will endeavor to achieve the best monthly rental we can for your asset finance. Lease payments are calculated by subtracting the residual from the net selling price, dividing that amount into payments and then adding the lease charge. The formulas mentioned below are basic and can vary.

Step 1 : Calculate the Depreciation
Depreciation = (Selling Price – Residual) / Number of Months

Step 2: Calculate the Lease Charge
To calculate the lease charge you will need to know the Money Factor (money-factor as the “interest rate” for the lease) – ((Net Sales Price – Residual)/ Term) + ((Net Sales Price + Residual) x Money Factor) = Month Lease Payment.

Step 3: Convert the Money Factor to an Interest Rate
This formula produces a high interest-rate it doesn’t necessarily mean that it is a bad lease.
(Money-Factor x 2400)

This “lease calculator” takes no account of the following:

1. The size of loan.
2. Your company’s circumstances.
3. A start-up company may need to have additional security to secure lease finance.
4. Other potential costs that an asset lender may charge.
5. Examples are documentation or “change of title” fees, which do vary but are generally minimal.
6. Other factors that may affect the rentals include:-

- The residual value of any asset to be leased.

- Quarterly, Half Yearly or Annual Rentals.

- The amount of deposit you may wish to put down.

You’ll soon find that the whole equipment leasing process is faster, simpler, and often less costly than other financing alternatives. You can rely on the equipment lease calculator to navigate your way through various options. Our calculator allows you to analyze your business transactions, calculate monthly costs, and preserve your resources.

Sanjana Sharma is an author of this article. For more information about equipment lease calculator, lease calculator, computer equipment leasing, used medical equipments, commercial truck leasing visit http://www.leasewithcrystal.com

While you may find the concept intimidating at first glance, lease purchase or ‘lease with option to purchase’ is actually a pretty straightforward concept that is easy to understand. What happens is that lease a house from its current landowner. Of course, there will be an end to this leasing period, whether it is a year or two after you move in.

And when your leasing period ends, you will have to buy the house. But wouldn’t renting an apartment for a year or two and then buying your house when you have enough money be better for you? This will depend on the arrangement you have with the owner of the house. Usually, 50% of your monthly rental fee will serve as a down payment for the selling price of the house.

This means that if you pay a monthly rent of US $500, US $250 goes to the down payment of your house. If the house costs US $20,000 and you wish to buy it after a year’s time, then you will only need to pay US $17,000. If you with to buy it after two years, you only need to pay US $14,000. As you can see, there is a huge benefit to making use of this program.

Of course, you need to keep in mind that the specific lease percentages will vary depending on the person you are dealing with. Make sure you have everything written down and signed by both parties, so there won’t be any problems later on.

So if you want to buy your dream home, but can’t qualify for loan programs then you should apply for a lease purchase instead.

Check out this site for more information http://leasepurchaseblog.edublogs.org/

This program is a simple yet beneficial one for both the landlord and the tenant. What happens is that the buyer pays a small down payment for the home and he can automatically move into it. Then each month he pays a small amount of money as if he were renting the place. Once the full price of the house has been paid then full ownership of the home is transferred to the tenant.

The advantages of engaging in this method of buying a new home are great. Firstly, you will only need to pay a small down payment. Likewise, you can move into your home right away. Also, you don’t need to go through the trouble of filling up stacks of forms, each of which has a chance of being rejected.

Here, you only have to fill up a single form in which you promise to pay for the entire selling price of the home. Then, you’re good to go. Keep in mind that by signing this contract, you are legally bound to buy the home. That means that you just can’t change your mind in the middle of paying the monthly dues.

And because you are assured that the house will be yours after the payment period, you can feel free to renovate it in any way you deem fit. Another advantage of this program is that you don’t have to pay any taxes or insurance fees. This will allow you to save lots of money in order to pay for the house.

This is only the beginning of the many advantages you can get by applying for the lease purchase program.

Check out this site for more information http://leasepurchaseblog.blinkweb.com/

More often than not, people interchange the two words. But there is actually a significant difference between the two agreements. When you undergo a lease purchase agreement with you the homeowner of the house you are buying, then you are obliged to buy the house after the leasing period.

On the other hand, if agree on a lease option, you don’t have to purchase the house after the leasing period ends. However, you can do so if you wish. When undergoing either agreement, a part of the monthly rental fee which serves as a down payment for the house. At the end of the leasing period this down payment will be deducted from the total selling price of the house, so you need to pay less.

If ever you have made a lease option agreement and you decide not to buy the house, then the down payment will not be returned to you. This is why it is better to ensure that you can pay for the house at the end of your lease period. After all, why would you rent the house using either method if you had no intention of buying it?

Since you want to pay for the whole selling fee of the house after one or two years, you need to ensure that you have enough money to do so by that time. Now is the best chance you have to buy the home of your dreams.

Just make a lease purchase agreement with the person selling that house.

Check out this site for more information http://leasepurchaseblog.vox.com/

First, you and the landlord have to decide on a specific duration of time for you to pay the lease purchase. Within this period, you are required to pay the monthly fee, a percentage of which goes to the down payment and the rest goes to the landlord. You have to absolutely meet the deadline for paying off the full amount of the house to have the right of ownership. Failure to do so means that your right of ownership can be forfeited and you can even be sued.

During the negotiation process between the buyer and the seller, the two can decide on a purchase price which is slightly higher than the market value. The important thing is that both parties agree on the price and the duration of time the buyer should pay it off. Typically, the common length of payment period ranges from a year to three years, at the end of which the buyer should have already applied for bank financing and had been able to pay the seller in full.

A lease purchase lets the buyer secure ownership for the house. The seller or landlord has no right to sell the house to anyone else unless the buyer neglects to fulfill his obligations. Also, if you’re wondering about the maintenance of the house, the responsibility lies on the buyer or the tenant. All the expenses including taxes and insurance should be paid by the buyer.

Another important thing that should be noted for those interested in a lease purchase is that the buyer is obligated to buy the house or establishment. Signing a lease purchase means commitment to pay the rent and the downpayment at the agreed period of time and the deadline should be met.

For other legal concerns about a lease purchase, you can read more in-depth articles online.

Check out this site for more information http://myleasepurchase.livejournal.com/