What is Leasing ?
Leasing is a means of delivering finance, with leasing broadly defined as “a contract between two parties where one party (the lessor) provides an asset for usage to another party (the lessee) for a specified period of time, in return for specified payments.” Leasing, in effect, separates the legal ownership of an asset from the economic use of that asset.
The basic reason why leasing is popular is that you don't have to find the money to pay for your equipment upfront thereby conserving your cash. This is particularly important for startups and growing businesses, where the finances are stretched.
“You can buy at today's prices with tomorrow's income,”
At the end of the lease period, the equipment is either leased again in a secondary agreement, transferred to the ownership of the business through a bid/auction, returned to the lessor, or sold to a third party.