A financial lease is a long-term rental agreement where the lessee (the user) pays for the use of an asset, such as equipment or vehicles, without owning it. The lease payments typically cover the asset's depreciation and interest, allowing businesses to use the asset while preserving capital for other investments. At the end of the lease term, the lessee often has the option to purchase the asset at a predetermined price. This type of lease is commonly used in industries like construction and transportation, where acquiring expensive equipment outright may not be feasible for many companies.