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CommercialLeasing Experts

Financing · Leasing · $250K – $100M+

A lease is a contract about the ending.

The two common equipment leases finish differently: a $1 buyout hands you the title for one dollar; an FMV lease ends in a choice — return, renew, or buy at market value. Pick the ending before you sign.

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Row of identical new track loaders on a dealer lot at dawn

Overview

How equipment leasing works

In a lease, the lessor owns the equipment during the term and you pay to use it. What separates one lease from another is the last day. A $1 buyout lease amortizes like a loan and ends in ownership — the buyout is one dollar. An FMV (fair market value) lease carries lower payments and ends in a decision: send the equipment back, keep leasing, or buy it at its then-current market value.

That difference drives the economics. The $1 buyout suits machines you already know you will keep — it is financing in lease paperwork. The FMV lease suits equipment that ages out before it wears out: imaging systems, IT hardware, machines on a refresh cycle. Lower payments now, in exchange for equity you are not building.

Lease pricing usually folds into a payment rather than a stated rate, and it varies with credit profile, equipment age, and term. So compare leases by total cost: every payment, plus the buyout, plus any return costs. The worked example below prices a payment stream; the leasing-vs-financing guide covers the decision in depth.

Process

Step by step

  1. Choose the ending

    Decide whether the equipment should be yours at term end. Keep it: $1 buyout. Refresh it: FMV. Everything else follows from this call.

  2. Submit the request

    Share the equipment quote, the amount, and the term you want. The structure you chose shapes the proposal.

  3. Read the lease terms

    Payment, end-of-term options, notice windows, and return conditions all live in the document. The notice window matters most — miss it on some FMV leases and the lease renews automatically.

  4. Sign and take delivery

    The lessor pays the vendor and holds title through the term. You run the equipment and make the payments.

  5. Execute the ending

    At term end: pay the dollar and take title, or return, renew, or buy at market value — whichever option you set on day one.

Good fit

When it makes sense

  • The equipment ages out before it wears out — imaging systems, IT hardware, anything on a refresh cycle.
  • Lower monthly payments matter more right now than building equity in the machine.
  • You want a clean exit at term end instead of a resale project.
  • You already know you will keep the machine — a $1 buyout delivers loan-like ownership in lease paperwork.
  • You would rather keep cash and bank lines free for operations.

Eyes open

Worth weighing

  • Run the full math on an FMV lease: payments plus the eventual purchase can total more than a loan on the same machine.
  • Return conditions are real obligations — wear standards, freight back to the lessor, notice windows. Missed notice on some leases triggers automatic renewal.
  • An FMV lease builds no equity. Walk away at term end and the payments bought use, not ownership.
  • Early exit is expensive. Leases price the whole term, and most are non-cancellable.
  • Accounting and tax treatment differ by lease type. Confirm the treatment with your accountant before choosing a structure.

Questions

Asked and answered

The ending. A $1 buyout transfers title for one dollar at term end — it works like financing, and the payments run close to loan payments. An FMV lease costs less per month and ends with a choice: return the equipment, renew, or buy it at fair market value, a price set at the end rather than in advance.

Per month, the FMV lease. Over the life of the deal, it depends on the ending: return the equipment and you paid for use; buy it at market value and the total can pass what a loan would have cost. Price both endings before signing, not after.

You return the equipment to the lessor's standards, renew the lease, or buy at fair market value. Each option has a notice window — a dated period when you must declare in writing. Calendar it when you sign; on many leases, silence means automatic renewal.

Yes, though the structure follows the asset. Older machines more often price as $1 buyouts, because residual value — the lessor's stake in an FMV lease — is harder to underwrite on aged equipment. Expect the term to track the machine's remaining working life.

It depends on the structure, and the label on the document is not the last word. FMV lease payments are often deducted as an operating expense; a $1 buyout is generally treated as ownership, which points toward depreciation and Section 179 analysis instead. Confirm the treatment with your tax professional before you sign — the Section 179 guide covers the basics.
Equipment FinancingLeasing vs Financing GuidePayment Calculator

Run the numbers. Then decide.

The calculators and the eligibility check show results on the page — no email required, no contact details collected. When the structure makes sense, the application asks for the equipment, the amount, and your timeline. Terms arrive in writing before anything is owed.

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