What is the difference between a financial lease and a sale and leaseback transaction

What is the difference between a financial lease and a sale and leaseback transaction Introduction: The World of Leasing Hello, everyone! Welcome to our video on the intriguing world of leasing. Today, we'll be focusing on two prominent concepts: financial leasing and sale and leaseback. While both involve leasing, they have distinct nuances that are essential to grasp. So, let's dive in! Financial Lease: A Comprehensive Solution A financial lease, often referred to as a capital lease, is a long-term arrangement where the lessee (the one leasing the asset) essentially assumes the role of an owner. This type of lease is commonly used for high-value assets, such as machinery or vehicles, and typically spans a significant portion of the asset's useful life. In a financial lease, the lessee bears the responsibility for maintenance, insurance, and other costs associated with the asset. Moreover, the lessee may have the option to purchase the asset at the end of the lease term at a predetermined price, often referred to as a bargain purchase option. Sale and Leaseback: A Unique Strategy Sale and leaseback, as the name suggests, involves a two-step process. First, the owner of an asset sells it to a buyer, who then leases it back to the original owner.