Leases are a creative tool to meet the equipment acquisition needs of your customers and suit their cash flow cycles. Here are some common leasing solutions:
Fair Market Value (TRUE LEASE)
For those worried about obsolescence, this plan offers the most options both during and at the end of the lease. This plan is beneficial to those wanting to have both a small security deposit and a relatively low monthly payment. At the end of the lease term, the lessee has the option to extend the term of the lease, return the equipment, or buy it at its fair market value.
$1 Buy – Out
For those who are fairly certain they wish to purchase the equipment at the end of the lease term, this is the recommended plan. At the end of the lease term, the equipment is simply purchased for $1.00.
10% Security Deposit Plan
This program offers the lowest monthly payment, and may therefore be especially attractive to those who can afford a security deposit of 10% of the equipment price. End-of-lease options still apply: the deposit can be applied to the purchase price of the equipment; the lease can be extended, or the equipment can be returned, and the deposit refunded.
10% Purchase Option
This program gives your customer most of the same basic features of a Fair Market Value (FMV) Lease, but with a fixed 10% purchase option at the end of the lease. The customer pays a slightly higher monthly payment for this guarantee. Also, a 10% Purchase Option Lease may be considered a True Lease.
Seasonal Lease Plans
Sometimes called a skip-payment plan, these plans allow up to three specified monthly payments to be omitted each year, an especially attractive feature for cyclical businesses. Other attractive deferred payment plans are also available.