A finance lease is mostly used as a method for new equipment purchase with at least three participants (the lessor, the lessee and the seller of the equipment).
The company offers optimal financial leasing terms where contract and lease duration for the asset become equal (reduced to maximum possible ratio).
Finance lease agreement grants the lessee with the ownership rights over the leased asset by the end of the lease term.
Sale-Leaseback is used when seller of the equipment and the lessee are the same legal entity. The owner sells assets to a leasing company simultaneously entering into a long-term lease for the same assets on a leasing basis.
This format is profitable for companies experiencing a serious lack of working capital, planning business and assets separation, changing management structure and approach, saving on income tax, profit and value added tax.
Sale-leaseback provides significant liquid assets growth of a company, as during fixed assets transfer in operative leasing, non-core business assets become receivables.