Lease the equipment you need without a big upfront cost.
Equipment leasing is an alternative to a loan when preserving cash matters more than owning the asset outright. We connect your inquiry with an institutional lender that offers the lease structure that fits your situation.
- Equipment leasing is renting the use of equipment for a term, typically with little or no down payment and a lower monthly payment than a loan.
- At the end of the term, you return the equipment, renew the lease, or buy it — depending on the lease type (FMV, $1 buyout, or operating lease).
- Leasing tends to fit equipment you'll upgrade or replace before it's fully depreciated; financing tends to cost less if you'll keep it for its full useful life.
When does equipment leasing make sense for a business?
Leasing makes sense when preserving cash matters more than owning the equipment outright, or when you expect to upgrade the equipment before it's fully depreciated.
What are the common equipment lease types?
The right structure depends on whether you plan to keep the equipment long term or upgrade it before it's fully depreciated.
Fair market value (FMV) lease
Lower monthly payments, with the option to buy the equipment at its fair market value, renew the lease, or return it at the end of the term. Often used when equipment may be upgraded or replaced.
$1 buyout lease
Structured more like a loan, with the equipment transferring to you for a nominal $1 at the end of the term. Used when the intent is ownership, but a lease structure fits the business's accounting or cash flow better.
Operating lease
Short-term use of equipment that doesn't need to be tied to the business's balance sheet as an owned asset, common for equipment with a shorter useful life or frequent technology upgrades.
| Lease type | Monthly payment | End of term | Best for |
|---|---|---|---|
| Fair market value (FMV) lease | Lowest | Buy at fair market value, renew, or return | Equipment you may upgrade or replace |
| $1 buyout lease | Higher (loan-like) | Ownership transfers for $1 | Intent to own, but lease structure fits accounting better |
| Operating lease | Low | Return the equipment; no ownership option | Short-term use or frequent technology upgrades |
Frequently asked questions
What is equipment leasing?
Equipment leasing is an arrangement where a business pays to use equipment over a set term, rather than financing its purchase. At the end of the term, depending on the lease type, the business may return the equipment, renew the lease, or buy it.
What's the difference between equipment leasing and equipment financing?
Equipment financing is a loan: you own the equipment from the start and build equity as you pay it down. Equipment leasing is closer to renting: you pay for use of the equipment, and ownership at the end of the term depends on the lease type. Our loan vs. lease guide walks through the tradeoffs in more detail.
Is it cheaper to lease or finance equipment?
It depends on how long you'll use the equipment, how quickly it depreciates, and your business's cash flow and tax situation. Leasing often has a lower upfront cost, while financing usually costs less over the long run if you keep the equipment through its full useful life.
Can I lease used equipment?
It's less common than leasing new equipment, but some lenders in our network do offer leases on used equipment, depending on its age, condition, and remaining useful life.
What happens at the end of an equipment lease?
It depends on the lease type. A fair market value lease typically lets you buy the equipment at its current value, renew the lease, or return it. A $1 buyout lease transfers ownership to you for a nominal fee.
How do I know if leasing is right for my business?
If you expect to upgrade or replace the equipment before it's fully depreciated, or want to preserve cash and credit for other needs, leasing is often a good fit. Our lease vs. buy calculator can help you compare the numbers for your specific situation.
Request Equipment Leasing
Tell us about the equipment you need and we'll be in touch to discuss lease options.