|Financing Solution Name||Lease-Purchase/Equipment Finance|
|Financing Solution Description||Leasing enables a building owner to use a energy efficiency installation without having to buy it. The installation is owned or invested in by another party, usually a financial institution such as a bank. The building owner pays a periodic lease payment to that party. Leasing is a well established method of financing energy efficiency projects. While the term is virtually interchangeable with equipment finance, the contracts typically cover all materials, labour and soft costs associated with an energy efficiency project. The customer either arranges lease financing through the manufacturer, vendor, or installer of the energy equipment being purchased or, if unavailable, directly with a third-party lessor. The customer and lessor sign a lease agreement once the project terms are agreed upon, and the lessor then provides the capital to purchase the equipment and associated installation services from a contractor. Once installation is complete, the customer begins making regular (typically monthly) fixed payments to the lessor on an agreed-upon schedule. However a critical distinguishing feature of equipment leasing is that the equipment is the collateral for the financing. The possibility that an equipment finance lender would repossess the equipment for non-payment puts the lender in a strong position but in practice it may be difficult to remove energy efficiency equipment that is embedded into a building or process.|
|Financing Solution Reference||https://oneplace.fbk.eu/financing-energy-efficiency/financing-energy-efficiency/transnational-methodological-framework/financing-models-for-energy-efficiency/leasing/|
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