• The lessor’s service is usu. limited to financing the asset, and the lessee pays maintenance costs and taxes and has the option of purchasing the asset at lease-end for a nominal price. Finance leases strongly resemble security agreements and are written almost exclusively by financial institutions as a way to help a commercial customer obtain an expensive capital item that the customer might not otherwise be able to afford. UCC § 2A-103(1)(g).
— Also termed full payout lease; tripartite lease. [Cases: Bailment 2. C.J.S. Bailments §§ 5, 14, 16–18.]
