Financial Lease

A financial lease is a long-term agreement where someone (the lessee) rents an asset, like equipment or property, from a lessor (owner) with the option to buy it at the end of the lease. Payments are structured to cover most of the asset’s value, making it resemble ownership over time. This arrangement helps businesses acquire expensive assets without large upfront costs, and the lease term typically aligns with the asset's useful life. It's a way to use valuable assets while gradually transferring ownership rights, often used for machinery, vehicles, or real estate.