Aviation Terms->Finance Lease
Also known as a capital lease, is defined when one of the following conditions are met: 1) at the end of the lease term the Lessee has the option to purchase the aircraft at an agreed price. 2) the lease payments are more than 90% of the market value of the aircraft. 3) the term of the lease is over 75% of the aircraft's usable life. With a finance lease the aircraft appears on the Lessee's balance sheet, as it is viewed as a purchase. A finance lease is a type of dry lease.