A Capital Lease, also known as a financial lease, has the characteristics of a purchase agreement.

Benefits of a capital lease:

• Little or no down payment required – no large initial outlay of cash
• Conserves working capital
• Allows companies to better manage budgeting cycle
• Can bundle multiple lease items – hardware, software, and services, for example
• Deduct depreciation plus interest
• Faster appropriation from operating budgets
• Master Lease Agreements make follow on transactions much easier