An equipment lease is a transaction when a "Lessor" owns particular equipment and agrees to permit a "Lessee" to use it. Lease terms typically cover one to eight or more year periods, depending upon the specific equipment's type and usage. Lessors ordinarily offer Monthly, Quarterly, Semi-Annual, or Annual payment scheduling, where applicable. Individualized payment structures can often be tailored to meet particular Lessee's cash-flow, or other financial requirements. Lease Agreements can often provide for the Lessee's purchase of the equipment at the end of the original lease term. Most often, the Lessee will select the specific equipment to be leased and choose a vendor from whom that equipment will be purchased. The Lessor will then purchase the equipment on the Lessee's behalf.
A lease is granted by the owner of property or equipment to allow a person to have a possession of and use it for a fixed period in return for a periodic rental payment. The leasing cost is the total rental price over the period of the lease and is often measured against the capital cost of the equipment together with the financing cost such as the equivalent interest on the capital over the period of the lease.