Let's examine what benefits this arrangement offers to a business owner.

• Preserve working capital
  

• The business owner doesn't need to invest a large portion of his working capital to buy the equipment.

• Easy to qualify

• Equipment leasing is much easier to qualify for than other types of financing, including SBA and conventional bank loans. It takes less than 30 days for the whole process, from application to funding.

• 100% of the cost is financed

• All of the cost associated with the equipment, including delivery, installation, and service charges can be financed through the lease.

• Never have to work with obsolete equipment

• After the lease term is up, you can trade-in the old equipment for new equipment. Only equipment leasing has this benefit.

• Payment options

• Payments can be tailor made to the client's needs. Payment structure depends on many factors, like type of equipment, type of lease, and the client's overall credit.
  

• Buy option
  

• There are 3 main buy options available at the end of the term. $1 buy out, 10% FMV (Fair Market Value), and Fair Market Value. This must be decided at the beginning of the lease, and they would affect the payment amount. $1 buy out option will have higher payments and FMV will have lower payments. There are also tax implications associated with these options and the client needs to discuss these with a CPA.

• Tax benefits

• Since the lease payments are generally considered a business expense, they could be fully deductible. Talk to a CPA or tax professional before making a decision.