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Concepts and definitions

Direct leasing

A short term contract, closely resembling a rental contract, that can be revoked by the lessee before the end of contract period if he so wishes. The asset can be leased to several successive lessees, meaning that the leasing period usually does not cover the asset's entire economic lifetime. The lessee retains his right to revoke the contract. The leasing charges usually include both service and rental costs.

Financial leasing

The parties of financial leasing are the seller of the object, the financing enterprise and the lessee.

An arrangement whereby a finance company acquires an asset that the lessee needs, and leases it to the lessee under a long-term leasing contract. The main categories of assets subject to financial leasing in Finland are machinery, installations and motor vehicles. Buildings and land are among the assets that may be the subject of lease. The leaser finances his acquisition by leasing the asset to the lessee.

The finance company retains ownership of the asset, and ownership is normally not transferred to the lessee after the expiration of the contract. The lessee has the right to use the asset over the lease period, which usually covers all of the economic lifetime of the asset.

Financial leasing acquisition

The acquisition takes place when the financing enterprise acquires possession of the object required by the lessee in its operations from the seller of the product.

The lessee independently selects the object to be leased and its supplier, and then signs a leasing contract with the financier.

Financial leasing capital value

Remaining capital value of the financial object.

Financial leasing rent

The rent of the leasing object paid by the lessee that includes both the interest calculated on the object's acquisition price and the handling fee, as well as the amortisation of the object's value excluding the residual value.

Financial leasing sales

Selling takes place when the financier of the leasing object sells the product at the end of the leasing period to the lessee or some other party.

At the end of the leasing period, the lessee has the opportunity to redeem the leased object at the price indicated by the residual value (purchasing option) or find a buyer for the object.

Property leasing

A form of financial leasing of immovable property. Sale and leaseback of immovable property is an arrangement where the owner of a property sells the property to a finance company and immediately leases it back. The lessee continues to hold and use the property throughout the entire leasing period. The lessee usually retains the option to repurchase the property subject to certain conditions.

Specified data on property leasing and other sale and lease back activity were collected in the statistics on financial leasing until 2008. From 2009 onwards these are included in other financial leasing activity in the statistics.

Sale and lease back contract

A sale and lease back contract is an arrangement whereby the owner of an asset sells that asset to a finance company and immediately leases it back. A sale and lease back arrangement normally involves only two parties: the financing company and the customer. The seller of the asset and the lessee are one and the same person, both nominally and factually. The lessee is normally the original owner of the asset, who retains possession and use of the asset during the entire duration of the sale and leaseback arrangement. The subject of lease is usually a building, but can be any kind of property, movable or immovable.

Specified data on sale and lease back contracts were collected in the statistics on financial leasing until 2008. From 2009 onwards the sale and lease back activity is included in other financial leasing activity in the statistics.