Operating or Closed End Lease

An operating lease is a lease agreement in which the lessor owns the equipment and leases it to the lessee for a term, in most traditional applications, generally between 36 and 84 months. An operating lease may provide the lessee with off-balance sheet financing if the lease meets certain accounting criteria. At the end of the initial term, the lessee may return the equipment to the lessor or re-lease the equipment for another specified term.