Operating lease

An operating lease is when you make an agreement with someone (usually a company) to use something for a little while, without actually owning it.

It's like when you go to a toy store and ask to borrow a toy for a little while, but you promise to give it back when you're done playing with it.

For example, a company might sign an operating lease agreement to use a car for a few years, but they don't actually buy the car. They just pay money to use it, like you pay money to rent a toy.

At the end of the lease, they usually have the option to give the car back, renew the lease or buy the car outright.

This can be a good option for companies who need to use things like equipment, buildings or cars, but don't want to pay for them all at once or don't want to keep them forever.