Lease concepts

a. Direct lease a lease with only one lessor who owns the leased asset.

b. Leveraged lease a lease in which the lessor leverages its position by borrowing in order to purchase the asset to be leased.

c. Sale and leaseback – the act of selling an asset to a lessor and them promptly leasing it back to free up the cash invested in the asset while maintaining its use.

d. Full service lease a lease for an asset and also its operation and maintenance.

e. Net lease a lease for the asset only, without any supporting services.

f. Operating lease a lease providing for the use of an asset for a short time relative to the economic life of the asset, much like a rental.

g. Financial lease a lease providing for the use of an asset for a period close to or equal to the full economic life of the asset, much like buying the asset using an intermediate- or long-term loan.