Finance Lease

What is a Finance Lease?   An easy to understand explanation of a finance lease.

A Finance Lease agreement allows you to sell the asset on the lenders behalf at the end of the Finance lease agreement.  And you get to keep a percentage  of the profits.  For the length of the finance lease however the lender retains ownership of the asset.  However,  there is not normally any other security necessary as the asset acts as security for the finance agreement. At the end of the agreement you have the option of retaining the asset and paying a nominal sum or selling the asset at the end of the finance lease agreement.

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In essence you effectively get all financial benefits and risks without actually acquiring legal title- the asset is never actually yours. The leasing rate is calculated to collect the complete value of the asset (plus finance charges) during the contract. At the completion of the lease, the asset is moved on, sold, to a third party and you can receive a share of the sale proceeds (if the finance lease is not being extended). In general after the end of the finance lease you will not become the owner of the asset at any time - unless you make a private contract with the third party. However, you would normally have the option to further extend your finance lease.  The benefit being as you will have paid for almost the full value during your initial lease period, the rental payments for the extended period will be minimal (sometimes referred to in Finance Lease terms as a "peppercorn rental")

A finance lease is fairly common when it comes to vehicle financing.  This is because the company would normally want to renew a vehicle every three years or at the end of the warranty period and start a new finance lease.

To get as finance lease speedy quote here.