Types of Leasing

  • A One Dollar ($1.00) Purchase Option:  Used as a financing tool when ownership is the goal.  Provides for $1.00 Purchase Option at end of lease term.  Lessee is treated as owner of the equipment for tax purposes.

  • Fixed Purchase Option Lease:  Provides lower monthly payment, conserving cash flow.  Includes predetermined purchase option to identify total lease cost in advance.  A fixed amount of 10% to 30% is due at the end of the lease.

  • Fair Market Value Lease:  (Often referred to as an "Operating" Lease)  Provides off-balance sheet treatment.  Produces lowest monthly payment.  Purchase Option determined at end of lease term.  (based on its fair market value)

  • MUNICIPAL LEASE:  Leases for federal, state, county, or local government entities.

  • Sale Lease Back:  Can be used as a refinancing tool where Lessee retains the tax depreciation and interest expense, or a true tax lease where the asset is removed from the balance sheet and treated as a Operating Lease or Capital Lease.

  • TRAC Lease:  A true tax lease that allows for a predetermined purchase option at the end of the lease term.  [only applicable for licensed over-the-road vehicles (Trucks, Tractors, and Trailers)].

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