Delivery & Acceptance Certificate
A document signed by the lessee to acknowledge the equipment to be leased has been delivered and is acceptable. The actual lease term commences once this document has been signed.
End-of-term Options
Options in the lease agreement that give the lessee flexibility in its treatment of the leased equipment at the end of the lease term. Common end-of-term options include purchasing the equipment, renewing the lease, or returning the equipment to the lessor
Lease Buyout
Occurs when the lessee purchases the leased asset from the lessor prior to the end of the lease term.
Purchase Option
An option in the lease agreement that allows the lessee to purchase the leased equipment at the end of the lease term for either a fixed amount or at the future fair market value of the leased equipment.
Renewal Option
An option in the lease agreement that allows the lessee to extend the lease term for an additional period beyond the expiration of the initial lease term, in exchange for lease renewal payment.
Sale-leaseback
A sale of equipment to a leasing company followed by a subsequent lease of the same equipment back to the original owner, who continues to use the equipment.
Skipped-payment Lease
A lease requiring the lessee to make payments only during certain periods of the year.
Step-payment Lease
A lease requiring the lessee to make payments that ether increase (step-up) or decrease (step-down) in amount over the term of the lease.
Upgrade or Trade-Up
An option that allows the lessee to add to, or replace, an existing pieces of leased equipment in order to increase its capacity or improve its efficiency.
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