The correct answers are: Its tax position might mean that it cannot benefit from the tax allowances that would be available for purchasing, thus removing one of the benefits of buying compared to leasing; It might have insufficient cash to afford to buy; It might want the option to upgrade or modernise the asset during the terms of the lease, which the terms and conditions of a finance lease might allow.

A finance lease is for the major part of an asset's useful life, hence it is not suitable to enter into a finance lease if the company wants the asset only for a limited period. This distinguishes a finance lease from an operating lease. However, a lease agreement might include a allowance for the lessee to upgrade to a different asset before the term of the finance lease has expired. Finance leases might also be suitable when an organisation has insufficient cash to afford to buy, or when it cannot benefit from all the tax allowances that would be available from purchasing.