Default risk of the lessee

Default risk from the lessee:Low sunk cost compared to asset value (because the requested deposit is embedded with target selling price and perceived haircut ).When default happens, it is in analogous to asset holder selling the asset to lessee at a price higher than target selling price, which mitigates the risks of other participants.

Lessee’s deposit will be settled among lessor and lenders (if lessor at the same time initiated a Pawn contract for unreturned asset).