A finance lease is one in which substantially all the risks and benefits of ownership pass to the lessee.

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A finance lease is a type of lease agreement in which the lessee gains substantially all of the risks and rewards of ownership of the leased asset. The lessee takes on the obligation of making payments on the asset for the duration of the lease, and at the end of the lease, the lessee typically has the option to purchase the asset.

A Finance Lease Is One in Which Substantially All the Risks