Finance leasing
 Hire purchase/conditional sale
 Leasing
 Leasing contract
 Leasing object
 Leasing rate
 Sale- & lease-back
 Lessee (beneficiary)
 Lessor (financier)
 Object risk
 Operating leasing
 Purchase option right (finance lease only)
 Residual values
 Service charge
 Tenor of the contract

An arrangement where the leased object is used by the lessee but ownership remains with the lessor. The accounting and fiscal depreciation of the object is carried out by the lessor. The lessee can render the leasing instalment fully deductible for tax reasons (interest and capital share plus VAT – some exceptions for cars and various specific structures). The leased object is given to the customer for a usage period which complies with its financial and technical lifetime. When the contract expires the lessee can acquire the leased object for a predetermined price. He can extend the lease term. Or he can return the object to the lessor.

Hire purchase/conditional sale (HP) is a well-established method for financing the purchase of assets by companies in Sweden. Under a HP agreement the customer pays an initial down payment. The remainder of the balance and interest due are paid over a predetermined period of time. The finance company which provides finance is known as the "creditor". It will purchase the asset on behalf of the customer, who is known as the "hirer". Under a HP agreement the customer acquires ownership of the equipment from the start. However the customer may not sell or dispose of the product during the hire purchase agreement. The creditor has security in the sold equipment. And he may repossess the equipment if the customer fails to pay the instalments. HP agreements are regulated by law.

Leasing is a contract between the leasing company (the "lessor") and the customer (the "lessee").
– The leasing company buys and owns the asset that the lessee requires.
– The customer hires the asset from the leasing company and pays rent over a pre-determined period for use of the asset.
There are two types of leases : Finance Leases and Operating Leases. Leasing has advantages over credit and loan approaches. For one thing it is a tax-deductible form of financing. The lessee can utilize the asset (e.g. machines, real estate, vehicles) without having to buy them. Therefore there is no need to spend a substantial amount of money at one time. The leased object remains the property of the leasing company until all leasing instalments have been repaid by the lessee. After the leasing contract expires the lessee can buy the object, extend the contract or return the asset. This depends on the leasing agreement he chooses.

Here the right of use of an object is transferred to the lessee for agreed payment, for a specified period, and under certain conditions. Finance lease contracts are mostly standardised. They reflect Swedish law and accounting principles.

These are economy goods (e.g. mobile goods or real estate), license, or immaterial or legal value, whose right of use is transferred from the lessor to the lessee under a leasing contract.

This charge is contained in a leasing contract. It is paid by the lessee to the lessor for using the leasing object. It can take the form of an equal, digressive, increasing rental approach. Or it can take the form of an instalment rental stream which takes into account factors such as seasonal nature of the lessee’s activity.

This is a form of leasing whereby the asset is sold by the lessee to the lessor and then leased back to the lessee for a predetermined charge. The customer gets the agreed purchase price back, which he invested when buying the asset. At the same time he uses the asset that has become property of the leasing company. In Sweden there are specific rules for sale-and-lease-back agreements which must be complied with.

A customer of a leasing company. He takes custody of a financed asset of the leasing company based on the entitlement of a leasing contract.

This is the finance company which carries out the procurement of the asset selected by the customer (lessee) and then “leases” it through a leasing contract under the agreed conditions.

The lessee bears a large share of the investment risk for the object. He is responsible for selecting a suitable leasing object and an appropriate supplier. Storing and servicing the leased object are also his responsibility. Investment risk (e.g. market value risk) is transferred to the lessor.

The lease will not run for the full life of the asset and the lessee will not be liable for its full value. The original manufacturer or supplier or a third party will assume the residual risk. This type of lease will normally only be used when the asset has a probable resale value. Essentially this gains the customer the use of the asset together with added services. It is a leasing structure where the contractual object is included in the asset of the lessor. The lessor depreciates the object and the lessee can fully deduct the lease rentals from income tax returns. At the end of the contract the lessor can return the asset or renew or buy it at a fair market value. The length of the contract is generally between 12 and 36 months..

A predefined sum for which the leasing company is obliged to sell the contractual object to the lessee.

A residual value is the value of the asset at the end of the lease term. Residual values play an important role in an operating lease that is used in conjunction with equipment that retains value at the end of the contract period. The residual value will be left out of the rental calculation. The leasing company or a third party will carry the risk, should the asset not be worth the amount of the residual value at the end of the lease.

An amount covering the administrative costs of the leasing contract. These include risk evaluation, contract preparation, and payment fees.

The amount of time in which a leasing contract must be continued. For finance leases, tenures normally vary between 36 to 120 months, depending on the type of asset. For operating leases, tenures generally range between 12 and 36 months.