Tax leases enable borrowers to benefit from the lessor's appetite for residual risk and taxable depreciation. Instead of borrowing to finance specific equipment, the borrower enters into a lease contract where the borrower is the lessee and LSC is the lessor. LSC holds title to the equipment and claims depreciation on its use. As an efficient taxpayer LSC can defer taxes and pass this benefit on to the lessee in the form of smaller rental payments. While rental payments will vary by asset class, for an emerging company keen on conserving its cash, this can be an important benefit.