In contrast to credit-financed purchases of an economic good, in leasing and renting transactions, the user of the object is not the legal owner. Therefore, these goods are not listed in the balance sheet.

The lessor, not the user of the economic good, finances the good’s purchase. Therefore, the lessee’s liquidity does not suffer. And the lessee does not have to borrow funds for financing the investment object (i.e. payments for one or more plants) before actually being able to use it. A so-called "pay-as-you-earn" principle makes it possible to finance the costs for an object from the profits generated with the investment object.

Important differences between leasing and renting
Leasing	Renting
The lessee defines – in agreement with the lessor – the requirements for the investment object and determines the procurement date. He chooses the manufacturer, negotiates the purchase/contract and handles the take-over or – in case of a plant – the construction management responsibilities. Depending on individual requirements, he can delegate these tasks completely or partially to the leasing company.	In general the landlord alone decides on the procurement date, the characteristics and the supplier of the investment object. Depending on the contract and the market situation (e.g. rent price changes) the duration of the rental agreement cannot be calculated in advance.
The remuneration for usage and the usage duration are fixed from the beginning for the whole duration of the contract. This ensures reliable planning. The identical interest of the lessor and the lessee in an optimal reuse of the investment object after the expiration of the leasing contract – either through the current user or a third party – ensures that the usability and marketability of the leasing object remains.	Depending on the contract and the market situation especially rent price changes and the duration of the rental agreement can not be calculated in advance. Additional imponderabilities are – since the landlord is responsible for maintenance – the usability at any time – and, for example because changed market situations necessitate a usage change – in the fitness for use.