ABSTRACT
This chapter discusses on Leasing and asset finance which is a type of funding where a business can acquire the use of an item of capital equipment without having to pay the full purchase price upfront. The term 'leasing and asset finance' actually refers to a range of rental products with some different features and characteristics. Under a Hire Purchase (HP) agreement the business pays a significant initial deposit of up to 20" of the cost to the finance company and starts using the equipment. In a leasing arrangement, to start using the equipment the business is normally only required to pay out a small initial deposit such as three or six month's rent in advance. Finance lease is a rental agreement to cover the full economic life of the capital equipment. Operating lease is a rental agreement that is not normally expected to run for the full economic life of the capital equipment.
