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The following glossary of leasing terminology should assist you when seeking out contract leasing services.
Primary Term is the initial term of the lease agreement. Termination during this period can incur penalties.
Residual Investment, also known as “residual value,” is the value of the asset at the end of the primary lease term.
Off Balance Sheet is an accounting characterization that describes a lease in which the entire lease payment is expensed and the asset and liability do not appear on the company's balance sheet.
Fair Market Value is the current market value of equipment within the open market, i.e. the typical second-user price for the equipment.
Front End/Stepped Rental describes a profile payment. By making low or even zero payments in the early days of a lease, customers may avoid budgetary constraints and may better match revenue and expenses.
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