What is equipment leasing?

Equipment leasing is a contractual method where a business (lessee) gains the right to use equipment owned by a leasing company (lessor) for a set duration in exchange for periodic payments that include interest and a portion of the principal. This allows businesses to use machinery without outright ownership, benefiting from fixed, predictable payments. At the lease conclusion, various options exist, including purchase (possibly with a balloon payment), renewal, or return of the equipment. It's crucial to consider the overall cost of leasing and fully understand the terms involved.