Operating Lease Finance
Operating Lease Finance refers to a type of lease agreement in which the lessee (the party leasing the asset) does not assume the risks and rewards of ownership of the leased asset. The lessor (the party providing the asset) retains ownership of the asset and is responsible for maintenance, insurance, and other operating costs. The lease term is typically shorter than the useful life of the asset, and at the end of the lease term, the lessee usually has the option to return the asset, renew the lease, or purchase the asset at a predetermined price. Operating lease finance is commonly used for equipment, machinery, vehicles, and real estate.