What type of equipment is suitable for operating leases and finance leases?

2026-05-19

Choosing between an operating lease and a finance lease ultimately depends on how long the asset will be used, how much value it is expected to retain over time, and how much risk the company is willing to take. Both options have their advantages, but they are suited to different types of investments. Below, we outline the key differences and when each leasing model is most appropriate.

Operating Lease

An operating lease is typically suitable for equipment or assets that are only needed for a limited period of time, meaning for only part of the asset’s useful life.

Examples include:

• Premises rented for a specific period without any intention of ownership.

• Copiers and office equipment used for a few years and then replaced with newer models.

• Cars that are often leased for 36 months to avoid the risk that the vehicle’s value is lower than the residual value when the agreement ends.

This type of lease is often used when a company wants a fixed monthly cost and to avoid the risk and responsibility associated with the asset’s value after the lease term ends. It also makes budgeting simpler and more predictable.

Finance Lease

A finance lease is better suited for assets that the company intends to retain and use over a longer period, often even after the lease term has ended.

Examples of such assets include:

• Machinery with high and long-term value.

• Gym equipment, machinery, or similar investments designed to last for many years.

For example, if you lease gym equipment for SEK 250,000 with a residual value of SEK 10,000–25,000, it is rarely reasonable to return the equipment when it is still fully usable and could potentially be used for another 15 years or more. In such a situation, it is often better to settle the residual value and retain the equipment.

However, a finance lease is less suitable for assets that depreciate quickly or need to be replaced frequently, such as computers, as they rarely retain significant long-term value after just a few years of use.