A master lease is the same as a Lease agreement, which binds a lessor of equipment and lessee together for a fixed term.

A master lease is one where the lessee is a public, state or governmental entity. The legal documentation is different than a standard lease because of the unique status of public entities. The rates are typically lower than rates for normal business.

An operating lease is a lease where the lessee makes the payments for the fixed term of the lease without any intention of owning the equipment at the end of the lease. This means that the lessor will be stuck with the equipment at the end of the lease. In a operating lease (a true lease), the lessee should be able to legally deduct their payments as a rental expense.

A partnership is a business owned by two or more people who share profits and losses. Owners are personally liable for the partnership’s debt.

A personal guarantee, also known as P.G., is the guarantee of an individual to be personally responsible for the obligations under the lease. Personal guarantees are required on almost all leases unless special permission is made by the lessor to not have one. For example, special permission may be given to a corporation that has been in business for over 10 to 15 years with solid financials.

A purchase option is the option of a lessee to purchase the equipment at the end of a lease or walk away from it altogether, once the obligations of the lease have been satisfied. The purchase option is predetermined before the lease agreement is signed by the lessee.