This type of contract aims to improve the cash flow of the client; the client sells an asset (car, truck, production asset, real estate, etc.) to the lessor. The lessor then leases the asset to the client.

Under this contract, the lessee has an obligation to buy the asset either during or at the end of the contract period after paying the contractually agreed rentals, which sometimes include a balloon payment.

Under the operating lease arrangement, the lessee can use the asset to run the business for a short period of time, but does not own the asset. The lessor will hold responsibility for the insurance and maintenance against pre-agreed rental fees paid by the lessee.