

A finance lease is a fixed term, fixed rate agreement that transfers ownership of equipment upon payment of a residual. Terms are generally between 2 -5 years and residual amounts are generally governed by the Australian taxation office guidelines.
Pros
payment of the residual
mortgage security
Cons
but an obligation
with an operating lease
All types of business use Finance Lease. It is most utilised by businesses that
prefer equipment ownership.
Finance lease payments are generally treated as a expense item meaning that
100% of payments are expensed.