Equipment Leasing Programs - Finance Lease

Unlike an Operating Lease (see previous post) a finance lease is a form of leasing where you, the lessor, pay the full cost of the equipment, plus interest, over the primary term of the lease agreement. Monthly payments are determined during the lease structuring process and represent the full value of the equipment.

Key points of finance leasing:

• The value of the asset (equipment being leased) is shown on your balance sheet
• This lease structure is typically not used if rapid tax benefits are desired.
• Opportunity to own the equipment at the end of the lease is more advantageous being that the equipment can be purchased for a minimal cost.