An equipment lease that serves the purpose of financing is known as a(n)__________ lease.

Question

Quizplus · Accepted Answer

A finance lease is designed to provide financing for the acquisition of an asset, where the lessee (borrower) takes ownership of the asset at the end of the lease term or has the option to purchase it at a minimal cost. The lessor (lender) retains ownership during the lease period and receives rental payments. This type of lease is often used for expensive equipment or machinery. Option A) credit lease is not specific enough and could refer to any type of lease requiring credit approval. Option C) unterminal lease and Option D) revokable lease are not commonly used terms in the leasing industry.

An Equipment Lease That Serves the Purpose of Financing Is