What is Financial Leasing?
Your comprehensive guide to understanding the concept, characteristics, parties, contract elements, and key competitive advantages of financial leasing for individuals and businesses in Jordan.
A Flexible Contractual Agreement Enabling Asset Use and Acquisition
Financial leasing is a contractual agreement between the company (the Lessor) and the client (the Lessee), granting the Lessee the right to use an asset for a specified period in exchange for agreed periodic lease installments.
Financial leasing represents an advanced financing mechanism that empowers individuals and businesses to acquire capital and productive assets—such as real estate, vehicles, construction machinery, medical equipment, and industrial machinery—without exhausting working cash reserves or facing complicated collateral constraints.
Asset Utilization
Right to use the asset throughout the contract term.
Periodic Installments
Fixed or agreed periodic lease installments.
Ownership & Obligations
The asset remains legally owned by and registered in the name of the lessor during the contract term, with ownership transfer or purchase option handled according to contract terms upon full settlement of agreed obligations.
Parties of Financial Leasing
The financing process is structured across four core parties:
The Lessor
The financial leasing company.
The Lessee
The client benefiting from the financing.
The Leased Asset
The fixed asset subject to the lease contract.
The Supplier
The entity selected by the lessee to purchase the asset.
Elements of the Financial Leasing Contract
The contract is founded upon four essential pillars ensuring clarity and mutual protection:
Contract Tenure
The contractual period starting from the date specified in the contract or asset delivery protocol, and concluding on the agreed date, unless terminated earlier in accordance with its provisions.
Lease Return
The percentage rate on which lease installments are computed.
Installments
Periodic payment amounts agreed upon in advance.
Expenses & Fees
Fees and charges associated with the lease contract.
Financial Leasing Law No. (45) of 2008
Jordanian Financial Leasing Law No. (45) of 2008 governs the relationship between the parties to the lease contract.
The asset remains the property of the lessor throughout the contract duration.
Treatment, tax exemptions, and applicable fees are subject to current legislation and conditions applicable to each case upon executing the financial leasing contract.
Advantages of Financial Leasing
Flexible financing solutions giving you power and speed to acquire and modernize assets under competitive terms.
Repayment Flexibility & Seasonality
Flexible repayment schedules tailored to business cash flow and seasonality.
Financing Up to 100%
Financing up to 100% of asset value.
Primary Collateral
Relying on the leased asset and economic feasibility as primary collateral.
Effective Borrowing Alternative
Effective alternative to traditional borrowing channels.
Continuous Modernization
Encourages continuous asset modernization to keep pace with technological advancement.
Clear Statutory Framework
Clear statutory framework protecting the rights of all contractual parties.
Beneficiaries of Financial Leasing
We deliver specialized solutions meeting the needs of all economic sectors:
Ready to Leverage the Benefits of Financial Leasing?
Our team of financial advisors is ready to evaluate your request and provide financing solutions best aligned with your cash flows and aspirations.