Finance Lease
A Finance Lease is a contract in which a financial company gives the customer the right to rent equipment with the terms and conditions defined for both parts. The customer could buy the equipment using a purchase option, as defined in the contract.
The main difference between a Finance Lease and Operating Lease is that the Finance Lease has a defined purchase option in the contract that usually is 1 percent. The Operating Lease allows the customer to buy the equipment, but the purchase option will be defined at Fair Market Value at the end of lease. The laws do not allow an Operating Lease to determine the purchase option at the beginning of the lease.
There are also some tax differences between Operating and Finance Leases. In general terms, in Operating Leases, the full amount of rentals is tax deductible. In Finance Leases, this is not always the case. If you need further information about tax-related issues, please contact us.
Template of a Finance Lease Agreement (this template can be changed by the parties)
DEFENSOR DEL CLIENTE
SEGURO DE DEPOSITO - FOGAFIN
ESTADOS FINANCIEROS, DICTAMEN DE REVISOR FISCAL Y NOTAS A LOS ESTADOS FINANCIEROS, DICIEMBRE 31 DE 2009
CIT CAPITA COLOMBIA S.A. COMPAÑÍA DE FINANCIAMIENTO is a company supervised by
.