Conditional Sales Agreement

DEFINITION of 'Conditional Sales Agreement '

A lease agreement banks can offer to business customers that wish to finance purchases of new equipment. The business is able to take possession of the property as soon as the agreement is in force, but does not own the property until it has paid for it, which is usually done in installments. If the business defaults on its payments, the bank will take possession of the item.

BREAKING DOWN 'Conditional Sales Agreement '

Acquiring property through a conditional sales agreement may allow the business to deduct the interest expense and depreciate the item on the business' tax return. A conditional sales agreement may not require a down payment and may also have a flexible repayment schedule.



RELATED TERMS
  1. Licensing Agreement

    This term refers to a written agreement entered into by the contractual ...
  2. Lease Extension

    A legal agreement that extends the term of a rental agreement. ...
  3. Trading Partner Agreement

    An agreement drawn up by two parties that have agreed to trade ...
  4. Lease To Own

    An arrangement where an individual enters into a lease agreement ...
  5. Gentleman's Agreement

    An unwritten agreement or transaction backed only by the integrity ...
  6. Form 4797

    A tax form distributed by the Internal Revenue Service (IRS) ...
Related Articles
  1. Professionals

    Structure and Tax Considerations of Buy-Sell Agreements

    Structure and Tax Considerations of Buy-Sell Agreements
  2. Professionals

    Buy-Sell Agreements, Installment Notes, Self-Canceling Note

    Buy-Sell Agreements, Installment Notes, Self-Canceling Note
  3. Professionals

    Business Uses of Life Insurance

    Business Uses of Life Insurance
  4. Investing

    How Does Depreciation Reduce My Tax Bill?

    How the depreciation tax rule can assist real estate investors.
  5. Investing Basics

    The LLC Operating Agreement Template, And Why You Need It

    For some business owners, creating an LLC offers the best of both worlds. But your state's rules might not suit your needs. Hence the Operation Agreement.
  6. Professionals

    THE OPTION AGREEMENT

    Option Agreement All new option accounts must be approved by the registered option and security futures principal prior to the first option trade. An option investor must sign and return the ...
  7. Home & Auto

    The Complete Guide To Becoming A Landlord: Hiring A Property Manager

    A property manager can perform such duties as marketing your rental property, selecting tenants, maintaining the property, creating budgets and collecting rent. You may consider hiring a property ...
  8. Investing Basics

    What's a Reverse Repurchase Agreement?

    A reverse repurchase agreement is the buyer side of a repurchase agreement (also called a repo).
  9. Investing

    How Rental Property Depreciation Works

    It's a bit tricky, but a valuable tool to make your investment pay off.
  10. Entrepreneurship

    Selling Your Business: How to Prepare

    Once you have a solid, stand-alone business with solid finances, it's time to put a price on it. Here are the steps needed to prepare for a sale.
RELATED FAQS
  1. Under what circumstances would someone enter into a repurchase agreement?

    Learn when investors want to enter into a repurchase agreement, such as to gain quick access to liquidity and enjoy flexibility ... Read Answer >>
  2. Which terms should be included in a partnership agreement?

    Understand what specific terms should be included in a business partnership agreement and how each affects the partners in ... Read Answer >>
  3. How do small firms record installment sales?

    Read up on what an installment sale is, how to account for it and the benefits a small business may receive by using the ... Read Answer >>
  4. What are the financial benefits of hire purchases?

    Discover more about a hire purchase plan, and learn some of the specific financial benefits for a company using this plan. Read Answer >>
  5. What are the differences between installment sales and credit sales?

    Determine the differences between credit sales and installment sales, which businesses often offer their customers for deferred ... Read Answer >>
  6. What is the primary use of reverse repurchase agreements?

    Discover how the Federal Reserve utilizes reverse purchase agreements for the primary purpose of offsetting temporary shifts ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center