If you are starting a business and could use some cash-flow relief to ease some of the pain, we can offer you a leasing solution to get your equipment for a low monthly rate for a period of your choosing. You can now choose a term between 2 and 5 years to lease our commercial equipment. At the end of the lease term, you can purchase the equipment for a small fee.

Note that in this business (as in many businesses), “leasing” is actually ‘financing’ – meaning that you will own the equipment for a small fee (as little as $1) at the end of the “lease term.” So why is it called “leasing”?

The answer is for business tax purposes. While we are not accountants, tax specialists, or lawyers, and you should check with your own professionals if there are questions, “financing” (meaning that your intent is to purchase) is done in the form of a “lease” so that your ENTIRE monthly payment is an operating expense. That is, the entire payment is (likely) deductible; not merely the interest. (Had it been a loan, then only the interest portion of your payment is deductible.)

To preserve this technicality (making it a “lease” instead of a “loan”), you will “purchase” the equipment at the end of the lease term – typically for $1, but it depends on your credit score. Again, check with your tax person to see how this pertains to your situation.

Frankly, the equivalent “interest rate” that you will pay for a lease like this (it is not called this in a lease) will likely be higher than that of a bank loan. If you simply want to finance the equipment, you should get a loan instead. The only reason that you would do this as a lease (at a higher interest rate) is so that your entire payment would be deductible. If this is NOT your situation (i.e., if you are a homeowner buying equipment for personal use), you would be better off financing a real loan with your own bank.

And keep in mind that since this is a “lease” (that you will be using as a financing alternative), and not – technically – “financing,” the Lease Term is fixed. While you can choose it at the onset (2-5 years), you CANNOT pay it off early. The “lease term” is contractual.