Leasing

Formal

Just one form of finance available to a company to fund the use of Capital Equipment. Containing many tax advantages, and elements of a ‘residual value’ of the asset making this form of finance quite cheap. The asset is held as security against this obligation to pay a rental.

Real-world Example

A company leases its office photocopiers rather than buying them outright, paying a regular fee to use the equipment without tying up capital in an asset it doesn't need to own.