Equipment leasing end of term options
Equipment leasing offers several end of term options which can be customized
to meet your needs. I can advise you as to the best end of term option based on
your business and the equipment you are leasing.
Fair Market Value
This equipment leasing end of term option is considered a tax lease or
operating lease by the IRS and your payments will qualify as an operating
expense. At the end of the term you have the option to return the equipment,
continue leasing the equipment, of purchase the equipment for it's fair market
value.
$1.00 buyout
The $1.00 buyout leasing end of term option is like a finance agreement
similar to a bank loan. You depreciate the asset over the leasing term. There is
no trade in option at the end of the leasing term and you own the equipment for
$1.00 ($101.00 in Florida)
10% purchase upon termination
This leasing structure can give you a lower monthly payment as you are
agreeing to a 10% (of the original cost) payment at the end of your lease.
Purchase or Renewal Option (PRO)
Pro leases are treated by the IRS as a true or operating lease and the
Leasor takes the depreciation deduction but passes that deduction to you as a
lower payment rate. At the end of the term, you have the ability to purchase the
equipment for a predetermined sum or renew the lease based on a predetermined
percentage of the original cost.
"If it appreciates, buy it. If it depreciates or becomes obsolete, lease it!"
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