You can decide whether a lease appears on your balance sheet. With a capital lease, you’re treated as owner of the leased equipment.

Another type of lease, the operating lease, takes equipment off your balance sheet, improving your financial ratios. Operating leases appear on your income statement as an operating expense. They’re simply a footnote on your balance sheet. Off-balance-sheet financing lowers the debt to equity ratio, raises the current ratio (liquidity), and raises return on assets (ROA). 

You should consult an accountant on which type of lease is right for you.

For more information on our leasing products, contact the loan professional nearest you .