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Financial leasing is one of the best tools of financing that plays an important role in financing investments related to medium and small industries which need tools and equipments and other supplies of the industrial activity . Financial leasing offer funding for several years to reduce the investment cost so as to start the new activity. Accordingly the user (lessee) will have the right to use a certain asset which is owned by lessor this is pursuant to a contract that is signed by the two parties , and which gives one of them the right to use the asset owned by the other party . He shall pay periodic installments for a certain period of time . The lessee shall buy the asset from the lessor by the end of the contract.

Advantages of Financial Leasing :

- It grants the companies the opportunity to acquire the capital assets needed for its activity without freezing a large amount of its capital in case it buys these assets. financial leasing grants 100 % from the asset’s price , and that allows the company to have more liquidity used in other activity, especially financing working capital.

- It gives the company the opportunity to either own the asset or not .

- It protects the lessee from any reduction that shall occur in the asset’s value as a result of technological progress. It facilitates the replacement and renovation processes.

- It keeps pace with the growing technical development that which increases the competitive ability of the products . This is in addition to protect the lessee from any increase in the cost of finance since fixing the interest which represents the company revenue all along the contract period.