There are two main types of asset finance: hire purchase and leasing. Hire purchase is a type of instalment loan, where the borrower makes regular payments to the lender until the full cost of the asset is paid off. At that point, the borrower owns the asset outright. Leasing is a type of rental agreement, where the borrower makes regular payments to the lender for the use of the asset. At the end of the lease term, the borrower has the option to purchase the asset, but they are not obligated to do so.
