What financial term entails renting equipment or assets instead of purchasing them outright?

Leasing is the correct term describing the practice of renting equipment or assets instead of purchasing them outright. This financial arrangement allows a business to utilize an asset without the immediate expense of buying it, enabling better cash flow management and flexibility. Leasing can also alleviate concerns about depreciation and maintenance costs, as the leasing company often retains ownership of the asset and takes care of its upkeep.

In contrast, acquisition refers to the process of obtaining a company or asset, usually through purchase, which requires a significant upfront capital investment. A sales agreement involves a contractual arrangement to sell goods or services, typically including the terms of payment, delivery, and warranties. Asset management focuses on managing a company’s investments and property to maximize returns, rather than addressing the method of acquiring assets like leasing does.