Three Ways to Finance an Asset
Off the balance sheet, owned for tax but leased for accounting, or owned outright with the funding arranged. Which one suits depends on your position, and we work that out with you rather than selling from a menu.
Off the balance sheet, owned for tax but leased for accounting, or owned outright with the funding arranged. Which one suits depends on your position, and we work that out with you rather than selling from a menu.
You need an expensive asset. Buying it ties up capital you would rather use elsewhere and puts debt on the balance sheet your lenders and investors watch closely. Leasing it used to solve both — until the accounting rules changed and almost every lease landed back on the balance sheet anyway.
Most lessors responded by withdrawing, or by repackaging the same finance lease under a friendlier name. Neither helps you. What you actually want is what leasing always delivered — capital left free, gearing untouched, cost spread across the years you use the asset, and somebody else carrying the risk of what it is worth at the end — arranged so it still works under the rules as they are now.
The classical lessor outcome restored — capital preserved, gearing protected, expense smoothed and predictable — delivered through a proprietary structure engineered to operate across multiple jurisdictions.
Under IFRS 16 and ASC 842, lessees in virtually every reporting jurisdiction must now recognise a right-of-use asset and a corresponding lease liability for substantively every lease. The classical operating-lease benefit — clean balance sheet, predictable expense, preserved gearing — was eliminated within a single accounting cycle.
The L&ELP off-balance sheet capability is jurisdictionally agnostic by design. The architecture is structurally outside the scope of conventional lease-recognition rules — not bespoke documentation engineered to qualify under each local standard, but a single architecture that delivers the same outcome wherever the client reports.
Because of the L&EIP partnership structure rather than a conventional lease, the recognition rules of the local lease standards are not engaged. This protects the client from the risk that local interpretation, evolving guidance or auditor judgement disturbs the intended outcome. Structure, risk transfer and funding originate from a single integrated family.
Sponsors and corporates reporting under IFRS, US GAAP or any national standard, whose investor base, lender base or covenant framework places a premium on balance-sheet metrics and predictable expense recognition. Particularly suited to multi-jurisdictional groups requiring a single consistent outcome across their full reporting footprint.
The fiscal benefits of ownership without the balance-sheet liability impact. Engineered for listed entities and sponsor-backed businesses whose investor base prefers particular leverage and return metrics.
Some entities want the tax position of ownership — depreciation, interest deductibility, capital allowances — without the balance-sheet consequences. Conventional leases force a binary choice between fiscal benefit and reporting optics. The right answer often lies in the middle.
The synthetic structure is owned for tax purposes and leased for accounting purposes — delivering the depreciation and interest treatment of debt-financed acquisition whilst preserving the reporting optics of an operating arrangement.
Listed entities, sponsor-backed businesses and private-equity portfolio companies whose investor base scrutinises leverage and return-on-assets metrics, but whose tax position benefits materially from ownership treatment. Common applications include corporate real estate, mission-critical equipment and infrastructure with long economic lives.
Maximum ownership benefits, full capital allowance treatment and direct asset control. Suited to entities that prize transparency and long-term equity build over reporting optics.
For some sponsors, the right answer is ownership — direct asset control, full capital allowances and the long-term equity build that comes from owning rather than leasing. The structuring challenge is then financing the acquisition efficiently, with the risk transfer and capital commitment that traditional banks no longer offer.
L&ELP coordinates the acquisition, L&ERMP transfers residual and obsolescence risk to investment-grade counterparties, and L&EGC funds the structure as principal. The client receives a financed-ownership outcome with the same integrated coordination that defines the off-balance sheet route.
Entities that prize transparency and long-term equity build over reporting optics, with the balance-sheet capacity to absorb the asset and the strategic intent to retain it through and beyond the lease term. Common applications include real estate held for the long term, strategic infrastructure and equipment central to operational identity.
Engagement is staged, transparent and progressive — designed to deliver certainty at each milestone before commitment escalates.
We assess the project, the strategic objective and the balance-sheet position.
Where a workable structure is available, we confirm it. Where it is not, we say so plainly and at the outset — no protracted process, no false hope. The conversation is short, confidential and substantive.
Detailed review of the accounting framework, taxation position, asset profile and risk landscape.
Followed by a complete economic and accounting model of the proposed structure. The client sees the answer before agreeing to pay for it — preserving the right to walk away if the modelled outcome does not meet expectations.
Coordinated legal, tax and risk-transfer documentation across every relevant jurisdiction.
Delivered by the same team the client engaged at the outset. No handovers, no learning curves, no rework. The relationship that began with the confidential review carries through to financial close without interruption.
Active management throughout the lease term.
Residual administration, refinancing options and structural amendments where commercial circumstances evolve. The relationship does not end at financial close — it begins there.
The structures described on this page are indicative and are provided for general information. Availability, terms, accounting treatment and tax outcomes are determined case by case and depend on the asset, the jurisdiction and the client's own reporting framework. Nothing on this page constitutes accounting, tax or legal advice, and clients should satisfy themselves and their auditors independently before proceeding. Nothing on this page constitutes an offer, an invitation, or a commitment to provide finance.