Dictionary of Procurement Terms

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  • Financial Lease

    A lease used to obtain financial leverage and related long-term benefits. Generally long-term, for a fixed period of time just short of the approximate life of the equipment being leased. Usually of two types full payout (the lessee pays the full purchase price plus interest charges plus maintenance, insurance and administration costs) and partial payout (gives the lessee credit for the residual value of the leased item after the lease period is complete). (Schiller, 2000)

    See Also: Operating Lease