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Finance & Banking vocabulary · Corporate Finance

Leasing

Meaning in finance & banking, with examples

/ˈliːsɪŋ/nounCommon term

In finance & banking, leasing means: A way of financing equipment, vehicles or property in which a leasing company buys the asset and a business uses it in return for regular payments.

In Turkish: finansal kiralama, leasing

How it is used

Used in corporate and SME finance. In a finance lease the user carries most of the risks and rewards and often becomes the owner at the end; an operating lease is closer to renting. The user is the 'lessee' and the leasing company the 'lessor'. The verb is 'lease'.

Example sentences

  1. The factory financed its new production line through leasing instead of a bank loan.

  2. Our group's leasing company offers machinery leasing to SMEs.

Common collocations

  • finance lease
  • operating lease
  • leasing company
  • lease payments
  • equipment leasing
  • working capitalThe money a business has available for its daily operations, calculated as current assets minus current liabilities.
  • SMEShort for small and medium-sized enterprise: a company below certain limits for staff and turnover. In the EU, SMEs have fewer than 250 employees.
  • factoringA form of financing in which a company sells its unpaid invoices to a factoring company or bank at a discount and receives cash before its customers pay.
  • assetSomething of value that a person or company owns or controls, such as cash, buildings, receivables or investments.
  • depreciationSpreading the cost of a long-term physical asset, such as a machine or building, over its useful life; also a fall in the value of a currency or asset.

More terms: Corporate Finance

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This page explains English vocabulary for learners. It is not financial advice.