Finance Leasing Manual - FLM23.02

Intermediate lessors: backing-out

As a result of 'backing out' arrangements (see FLM24.01) the company will become an 'intermediate lessor'. It will receive rentals from the end lessee and it will pay rentals to the new head lessor. It will make its profit on the deal from the difference between the rentals it receives and the rentals it pays. The end lessee may be unaware that the lease has been backed out.