An operating lease is a rental agreement for part of an asset’s working life. You pay to use the equipment for an agreed period, then hand it back. The lender keeps ownership and carries the residual value risk, so rentals are calculated on the value you use up rather than the full purchase price.
It tends to suit assets you want to refresh regularly, or where obsolescence is a real concern — IT equipment, certain vehicles, specialist kit that dates quickly. Because you return the asset, you avoid being left with something you no longer need.
The limitations matter. You build up no ownership and no residual value, so over several consecutive leases you may pay more than buying once would have cost. Agreements normally set mileage, hours or condition limits, and exceeding them can mean recharges when the asset goes back. Early termination is usually expensive.
Availability of operating leases depends on the asset type — lenders will only take residual risk where they understand the second-hand market. Terms are subject to lender assessment and your circumstances.