You can use this lease calculator to estimate the monthly payment on an equipment lease. Adjust the amount of financing and the lease term to get an estimated monthly payment.
This equipment leasing calculator tool is provided for informational purposes only and is not intended to provide actual rates. This calculator does not assure the availability of or your eligibility for any specific financing solution offered by Team Financial Group. For accurate and personalized information about financing options and rates, please contact our commercial financing experts.
Many businesses face cash flow concerns when they have to make a major equipment purchase. The cost of new equipment or equipment maintenance can take a bite out of working capital, but without equipment upgrades, businesses can’t stay competitive.
Commercial equipment financing solves this problem and lets businesses invest in their long-term success. Instead of having to pay the entire equipment cost up front, you can use financing solutions like loans, leases, and equipment financing agreements (EFAs) to acquire the equipment now and make smaller payments over time. With equipment financing, you can get the tools and assets your company needs without sacrificing cash flow.
Two of the most popular equipment lease options are the $1 buyout lease and the fair market value (FMV) lease.
When you purchase equipment using a $1 buyout lease, you’ll own the equipment or property, and it will show up as an asset on your balance sheet. A $1 buyout lease can go by a couple of different names; you might hear it called a capital lease or an equipment finance agreement (EFA).
Compared to a typical operating lease, a $1 buyout lease works more like a loan since you purchase the equipment outright. But when it comes time to make monthly payments (or however often your lease term specifies), the $1 buyout lease resembles what most people think of as a lease. Your $1 buyout lease won’t have stated interest rates like a loan would. Instead, you’ll make fixed payments, and the finance charges get rolled into your payments.
The $1 buyout lease gets its name because when you reach the end of the lease term, you’ll complete the payments on the asset for a nominal price, often $1.
Since you own the equipment, a $1 buyout lease makes sense when you’re looking to purchase equipment that will stay in use for many years and retain most of its value.
A fair market value lease (FMV lease) can be a type of operating lease. With an operating lease, you don’t own the equipment you’re leasing. But the payment structure is similar to a capital lease (like the $1 buyout lease): you may be able to get 100 percent financing with no down payment, and you’ll make fixed payments until the end of the lease term.
When the lease ends, you’ll usually have the option to purchase the equipment at the current fair market value (FMV), which is why it’s called an FMV lease. Or, you can choose to continue making lease payments and using the equipment. And if you don’t want to exercise your purchase option or continue leasing the equipment, you can return the equipment and walk away.
FMV leases tend to last between one and five years, and they make the most sense when you need to secure the use of equipment that needs frequent upgrades or won’t retain much value. Computers and other technology equipment are the classic example of assets that make sense to finance with an FMV lease, since these tools often become obsolete in a few years.
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