Glossary of Terms

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Step Lease

A financial contract in which the rent may change during the term of the lease contract. The rent change is known at inception, and is agreed upon by the financing company and lessee. Often a step-up lease allows the lessee to pay less initially and more later in the term. A step down lease works in the reverse manner, allowing the lessee to pay more initially and less later as the payment amount decreases over the term of the lease contract. These contracts are sometimes referred to as a "low-high" and a "high-low" lease structure, respectively. (Courtesy www.elfaonline.org)

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