Rental patterns

Leasing companies are able to provide a wide range of option when It comes to rental payment profiles and generally are more willing to adapt 'repayment' to the profile of a company is cash flow than traditional lenders.
- Rentals in advance - because a lease has to cover the full cost of an asset, the option available to a bank lender of only advancing a proportion of the asset value is not readily available to lessor . however ,it is possible to overcome this problem through charging rentals in advance and a common arrangement would be to charge six month 'rental in advance .
- seasonal - in seasonal businesses such as farming or tourism ,rentals can be tailored to be higher in the summer and lower in the winter .
- Escalating - rentals can be tailored to reflect the increasing cash generating capacity of an asset over its life.
- Deferred - a deferred profile will mean that payments will not have to begin until the asset starts to generate cash .while traditional lenders will often agree a capital repayment holiday ,they are very rarely prepared to agree a total finance charge moratorium to include interest ,which is what happens with a deferred rental arrangement .
- Balloon-for an asset where , despite the apparent depreciation profile ,the asset will have a significant value at the end may be appropriate to reflect the cash flow available from the disposal of the asset . IF a serious balloon profile is needed ,however ,an operating lease is probably the answer .