What is a finance lease?

Finance lease is a form of investment financing where the leasing company (Lessor) buys an asset pre-selected by the user (Lessee) and provides it to them under a financial lease agreement. The lessee undertakes to make regular payments to the leasing company in accordance with the agreed repayment schedule, and, upon full repayment of the lease liability, receives the right to acquire the ownership of the leased asset.