Lease Payments
Candlefocus EditorEssentially, lease payments are payments made for rental use of assets, rather than for outright ownership. Generally, a legally binding contract is formulated between the lessee and lessor in order to outline the individual terms of the lease. This usually documents the duration of the lease, the payment schedule, and any stipulated rules.
Typically, leases are utilized when the lessee can benefit from the asset more financially than they could by outright purchasing it, or when the lessee does not have sufficient financial resources to purchase the asset outright. Depending on the agreed terms, lease payments may consist of individuals either paying a fixed amount of money each month, or of making a lump sum at the start of the contracted period.
Typically, lease agreements may range from very short-term, such as month-to-month arrangements, to lifelong agreements, such as those commonly used in land-leases, which may last up to one hundred years or more. Regardless of their length, lease payments are intended to compensate the lessor and give the lessee the right to use the asset, typically as described and agreed in the contract.
Lease payments have become a popular financing option for both individuals and businesses. It is not unusual for individuals to enter into lease agreements for cars, computer equipment, and software. Businesses, too, have grown increasing reliant on leases, with IT, electrical, and electronic equipment commonly associated with the option.
In recent years, it has become more common for individuals to partner with leased asset providers who offer more competitive financing options than banks or lenders. These providers may offer individualized support, allowing the customer to choose payment schedules and other details to suit their specific needs. Moreover, through this financing option, businesses and individuals now have access to the assets they need faster and for significantly less capital outlay.
Overall, lease payments provide businesses, as well as individuals, a viable financing option that can prove to be more cost-effective when compared to outright ownership. It gives customers access to the assets they need without having to pay the total cost upfront. In addition, the ability to select a payment schedule and other terms according to individual needs makes this a very appealing option.