Finance Lease is one of the financial ways playing an outstanding role in financing investments, especially those related to small and medium industries that could use equipment and machines, besides other industrial activity tools. The financial leasing is supposed to be financing the aforementioned industries for many years in order to reduce the investment cost required for launching their industrial activity. And therefore, the user lessee has the right to use a certain asset owned by the lessor by virtue of a contractual agreement between the two parties authorizing each party to use an asset owned by the other in return for periodic payments set for a certain period of time. However the lessee has the right to buy the asset at end of the set period.

The privileges of Finance Lease Activity:    

The finance lease provides a lot of advantages as pointed out hereunder:
With finance lease, companies become able to own the necessary capital assets for their activities, so that if they buy these assets, they wouldn’t need to freeze a huge amount of their monies. In this case the finance lease provides up to 100% of the asset price, which saves the companies a lot of liquidity that can be used in other  activities, especially in financing the turnover of operating capital.

It also gives the companies the right to either  own the assets or not.

It protects the lessee from the depreciation of the assets value, which is caused by technological development, the facilitating of renewing and replacing operations, and putting up with technological advancement. Such advancements contribute to the competitiveness of the products. Protecting the lessee from the rising of financing cost is also another privilege of the finance lease, as in this case, the interest rate, which represents the company’s revenue, is being priced permanently as long as the contract period is.