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Finance Lease

As a hire contract between the lender (the lessor) for vehicles or equipment over an agreed period of time (the hire period), a Finance Lease is a funding facility that allows a client full use of an asset without actually gaining title. The motivation for using a finance lease can be for many reasons, primarily tax benefits or the cash flow advantage due to the treatment of the VAT on the lease rentals. (i.e. the VAT is spread over the term of the lease unlike Hire Purchase).