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Financial Lease

The lease can be for any period of time and is only subject to the residual being no less than the depreciated value of the asset being financed. It is an on balance sheet transaction and also requires the user to bundle all of the components of the solution.The borrower obtains the lease payments as tax deductions. It is also limited by the fact that it relates to the financing of goods, and is unsuitable for upgrades. Similarly to a Hire Purchase, the borrower cannot pass on title of the software licence to the lender. A Standard Finance Lease cannot be used to legally fund a software licence.