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Here the lender purchases the plant, equipment or vehicle required by the client (the lessee). The lender then leases the goods to the customer under a lease agreement.
When the lease expires the lessee can either:.
There are additional benefits associated with a standard variable
- Return the equipment to the lender who can sell it elsewhere. If the net sale is less than the residual value, the customer must make up the shortfall.
- Refinance the residual value.
- Pay out the contract.
- Make an offer to purchase, which may be accepted by the lender..