Financial Terms Glossary

Initial Lease Period

Formal

The initial minimum contractual period that a user of equipment and services provided under a lease is committed to under the lease agreement. Termination of leases inside this period carries penalties and is therefore very expensive.

Informal

Lease or Buy? - That depends upon your circumstances. Some suppliers claim that leases are more flexible - and that can be true. However, providers of finance and equipment need a minimum contractual commitment before supplying goods - this is the Initial Lease Period. The longer the period, the cheaper the rate, but the more expensive to terminate! (Editor - this is a massive over simplification of a very interesting topic!)

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