The leasing company purchases the equipment selected by the lessee and the lessee owns the rights to use the equipment and the rights to yield but has the obligation to pay rent by installment. When the lease expires, the lessee can acquire the ownership of the equipment by paying the amount stated in the contract to the lessor.
The lessee sells the ownership of its equipment to the leasing company to raise funds. By signing the leaseback contract with the lessor, it leases back the equipment for use and pays rent to the lessor by schedule during the period of leasing. And the lessee can regain the ownership of the equipment when the lease expires.
The equipment manufacturer establishes strategic partnership with the leasing company to provide financing to its clients through leasing so that they can sell their products and offer asset management afterwards. With such cooperation, it can incorporate financial leasing into its marketing system thus helping its client to raise funds. As a result, their client enjoys stronger purchasing power, and the manufacturer improves its reproduction capability and market share.