An Operating Lease on its own means the customer is sharing the operating risks. The leasing company take the residual value risk whilst the customer takes the risk of unexpected repair bills or machine operating costs. An Operating Lease offers off balance sheet funding with fixed low cost lease rentals reflecting a predicted future residual value which remains unpaid by the customer. This residual risk is taken by JCB Finance who recover the machine at the end of the period and attempt to sell it in order to realise this unpaid amount.

This transfer of risk allows the customer to treat the asset as off balance sheet - which can facilitate significant improvements on some of the key accounting ratios like return on capital employed. This tax efficient form of leasing is popular with Local Authorities due to their limited capital budgets and regulations that dictate the removal of residual value risk. It is also much used by public limited companies where accounting ratios are avidly scrutinised by the stock market. If required, repair and maintenance contracts may be added to this type of agreement which then becomes better known as Contract Hire - a virtually risk free method of operating plant and machinery.