Business and Personal Finance Dictionary

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• DIRECT FINANCING LEASE
  
  one in which the lessor's only source of revenue isinterest. The lessor (generally a bank or other financial institution) buys anasset and leases it to the lessee. This transaction is an alternative to the morecustomary lending arrangement in which a borrower uses the loan proceedsto purchase an asset. A direct financing lease is the functional equivalent of a loan.
  
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