What is a Lease?

The lease is a written agreement between two parties where the owner agrees to give out one of his assets to the lessee for personal use. A perfect example for this is when a land owner gives out his apartment for rent. They sign a contract in which it’s specified the amount of money what the tenant will be paying in what intervals and for how long the lease will be in place.

After the contract has been signed then the figures won’t be changed until both parties agree. There are quite a lot of advantages for leasing, the first is that there aren’t that many restrictive measures like on bank issued loans so this means that an average person can obtain a lease far more easier then a bank loan. Also another benefit is that it saves capital because the lessee brings hundred percent of the financing.

Another benefit is that in most cases tax saves are involved. The lease looks really similar to hire-purchase the only difference might be that there’s isn’t an initial deposit required. The term lease is related to the following ones capital lease, operating lease and sale and leaseback.