In contrast to a credit-financed purchase, with leasing and hire the user of a capital good is not its legal owner. For this reason lessees and hirers do not have to carry this good as an asset on their balance sheets.

In this case it is not the user of a capital good who finances its purchase cost. Instead it is the lessor or hirer.
Thus lessees/hirers do not have to undergo an outflow of liquidity and/or enter into third-party financing of the object invested in – take company buildings for example – well in advance of its initial use. Instead, it is possible to finance the cost of a capital good from the income generated by its use over time. This approach is in accordance with the "pay-as-you-earn" principle.

Hire	Leasing
As a rule, the hirer-out alone decides the time of purchase and the condition and the supplier of the capital good. The nature of the agreement and the market situation may mean that changes in hire rates and periods of hire cannot be calculated in advance. In contrast to leasing, suitability-for-use is usually the responsibility of the hirer. After all, changes in market conditions can call for a change in use.	The lessee – together with the lessor – defines the requirement profile for the object invested in. He fixes the purchase date to suit his specific needs. He selects the manufacturer. He conducts the purchase/agreement negotiations. And, if necessary, he sees to the transfer or, in the case of a company building, to managing the construction himself. Or, if he chooses, he can leave all or part of this work to the leasing company. Payments for use and the period of use are fixed for the entire term of the agreement from the outset. This means that definite planning is possible. The shared interest of the lessor and lessee in an optimum re-utilisation approach ensures that the suitability of the leased object for its destined use and its suitability for the market are guaranteed at all times. Even after the leasing agreement expires.