What is the difference between an operating lease and a financial,
or capital, lease?
Lease:
Leases are agreements in which the proprietor of the asset permits another party to utilize the properties in exchange for money or other asset or property.
Lease financing is a predetermined contract among the proprietor of the assets (lessor) and user of the assets (lessee), whereby the proprietor allows the user to frugally utilize the asset on the payment of periodical sum which is in the form of lease rental for a particular time period.
Lease financing is one of the significant sources of medium- and long-period financing where the proprietor of an asset gives another individual, the right to utilize that asset in contradiction of periodical payments. The proprietor of the asset is recognized as lessor and the occupant is named lessee.
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