Under a finance lease, the risks and benefits of ownership are retained by the customer although the legal owner of the asset for the term of the lease is the financier. The customer bears the risk in respect of the asset's residual value.

A finance lease has the following features:

• The asset and the liability are retained on the customer's balance sheet.
• Lease payments are usually tax deductible.
• The residual value is normally set in consultation with the customer/lessee. The customer has the residual risk on the asset.
• The redeployment of capital tied up in non-income earning assets into ‘core’ areas of the business.

A finance lease is based on a combination of the lease term and the agreed residual value. The cost of any associated management will depend on what services are required to be included in the lease agreement.

In order for LeasePLUS to prepare a quotation for a finance lease, it is necessary for LeasePLUS to receive the following information:

Lease Term: The lease term may be any period, including part years.

Residual Value: The residual value that you would like placed on the asset. The residual value normally represents what the asset's market value will be at lease end. There are some taxation restrictions as to what residual value may be set for certain classes of assets, for example, motor vehicles.