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Defining Lease Financing

Leasing means a general contract between user and owner of the asset over specified time period. The asset is purchased initially by lessor (leasing company) and thereafter leased to the user (Lessee Company) which pays a specified rent at periodic intervals. Thus leasing is an alternative to the purchase of an asset out of own or borrowed funds. Moreover lease finance can be arranged much faster as compared to term loans from financial institutions.

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