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.

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  2. Do working capital funds expire?

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  3. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  4. What does high working capital say about a company's financial prospects?

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  5. How can working capital affect a company's finances?

    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>
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