Rapid improvements in the technology that is driving scientific instrument development can make some laboratory tools obsolete in as few as five years after they are purchased. And with tight budgets, some organizations, especially high-technology startups, may not have sufficient cash to buy expensive equipment outright. In cases like these, leasing equipment could be the logical alternative.
The American Association of Equipment Lessors, based in Arlington, é produces several publications to help potential lessees understand the jargon associated with this complicated business. This glossary of lease-related terms is excerpted from “Equipment Leasing Is Good Business Here’s Why.”
Capital Lease A type of lease classified and accounted for by a lessee as a purchase and by the lessor as a sale or a financing, if it meets one of these criteria: the lessor transfers ownership to the lessee at the end of the lease term; the lease contains an option to...