A business lease purchase refers to an agreement where the lessee ultimately buys out the lease, that is, he buys the asset that had been leased for commercial usage. This option is convenient for the lessee as he does not have to pay the whole amount at one go and can pay the rent at regular intervals, although the rent amount in this case is higher than any ordinary lease. The amount at which the asset will be sold is either mentioned when the lease is created or the price is decided based on the market price when the lease term comes to an end. The lessor thus locks-in the lessee and if the lessee is not able to pay the amount, the lessor repossesses the asset.
Sample Business Lease Purchase:
This business lease purchase agreement has been created between the lessor James Holder and lessee Matt Downing in March 14, 2012 in Ohio. According to the lease, the lessor hereby agrees that the lessee shall have the right to use the leased property for business purposes for a period of 2 years during which he shall pay $4,000 per month as rent.
The agreement also has the option of lease purchase, that is, the lessee has the right to own the property once he pays a total of $100,000 and the lessor shall transfer all the rights to the property to the lessee.
The lessee shall be responsible for the maintenance of the property and both parties have to give a month’s advanced notice for termination of contract.
Signature (Lessor) Date
Signature (Lessee) Date