What is lease financing?

What is lease financing?


Lease financing is a contractual agreement between the owner of the assets (lessor) and user of the assets (lessee), whereby the owner permits the user to economically use the asset on the payment of periodical amount which is in the form of lease rent for a specific period of time. The title of goods remains with the owner (lessor) of the asset. It is the most important source of long term financing.
What is a lease agreement? What are its contents?
Lease agreement is a written agreement and also known as lease deed which starts the legal relationship between…
What are the advantages of leasing for the lessee?
Following are the advantages of leasing for the lessee:…
Does leasing increase borrowing capacity of a firm? How?
Yes, leasing increases borrowing capacity of a firm. For example, if a company at present has a 1:1 debt equity ratio…
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