Glossary of Terms

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Lease Purchase Contract

Full payout, net leases structured with a term equal to the equipment's estimated useful life. Because many lease purchases include a bargain purchase option for the lessee to purchase the equipment for one dollar at the expiration of the lease, these leases are often referred to as dollar buyout or dollar-out leases. Lease Purchases are generally considered to be Capital Leases from an accounting perspective and non-tax leases from a tax perspective due to their bargain purchase option and length of lease term. (Courtesy www.elfaonline.org)

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