Lease
A lease is a contractual arrangement between a lessor (the owner of the asset) and a lessee (the user of the asset) that grants the lessee the right to use the asset for a specified period of time in exchange for periodic payments. Leases are commonly used for tangible assets such as real estate, vehicles, and equipment. They are also used for intangible assets such as patents, copyrights, and trademarks.
History of Leasing
Leasing has been around for centuries, with the earliest recorded leases dating back to the Roman Empire. In the Middle Ages, leasing was used to finance the purchase of land and other assets. In the 19th century, leasing became more popular as a way to finance the purchase of large assets such as ships and locomotives. Today, leasing is used to finance the purchase of a wide variety of assets, from cars and computers to aircraft and office buildings.
Comparison of Leasing vs. Buying
| Leasing | Buying |
|---|---|
| Lower upfront cost | Higher upfront cost |
| Lower monthly payments | Higher monthly payments |
| No ownership of asset | Ownership of asset |
| Flexible terms | Fixed terms |
Summary
Leasing is a popular way to finance the purchase of assets, as it allows for lower upfront costs and more flexible terms than buying. Leasing has been around for centuries, and is used to finance the purchase of a wide variety of assets. For more information on leasing, visit websites such as Investopedia, The Balance, and the Small Business Administration.
See Also
- Rent
- Loan
- Mortgage
- Credit
- Debt
- Interest
- Capital
- Asset
- Equity
- Collateral
