Why is lease financing relatively more attractive from the standpoint of financial institutions?
Lease financing may provide a financial institution with significant tax and accounting benefits that are unavailable in a “straight” lending arrangement. Also, lessors are sometimes attracted to the fee income which materializes as a result of arranging a lease. Finally, not only is the economic position of the lessor secured by the leased asset, but in some cases a lessor may be attracted by the potential to profit from the realization of the residual value of the leased asset upon the expiration of the lease.
