Equipment Leasing Companies: Lease vs Finance, Buyouts and How to Compare
Use the equipment while the leasing company holds title. You pay a monthly payment, plus any buyout.
Soft credit pull only, no obligation
Rates, factor rates, fees and terms are set by the funding provider that makes your offer and are disclosed in that provider's agreement. Figures on this page are illustrative ranges from providers in our network, not offers. Capital Gurus is never the lessor. The purchase side is on the equipment financing hub.
- Same-day decisions
- from some providers
- Subject to provider approval and document turnaround.
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At a glance
| Amount considered | up to $500K on the application alone; up to $5M with full documentation, depending on the funding provider |
|---|---|
| Speed | same-day decisions from some providers, and funding as fast as 6 hours, subject to provider approval and document turnaround |
| Minimum time in business | 12 months, considered by some providers |
| Minimum monthly revenue | $15,000, considered by some providers |
| Credit considered from | 525, considered by some providers |
| Collateral | The equipment itself; a personal guarantee is commonly required |
| Cost expressed as | A monthly lease payment; on a buyout structure, an interest rate or a fixed cost of funds, quoted by the provider |
| What a lease is | The use of a named asset for a term; the leasing company holds title |
|---|---|
| End of the term | Buy, renew or return, by the structure you signed |
No lease payment appears on this page: the leasing company that makes your offer sets it. Some providers consider applications at these minimums. Meeting a minimum does not guarantee an offer.
How equipment leasing works
Definition
An equipment lease is a contract to use a named asset for a fixed term in exchange for payments, while the leasing company holds title.
Whether you buy it, renew or hand it back at the end is set by the structure you sign.
Lease or finance: what is actually different?
Ownership. Financing is a purchase with a lien until it is paid; on a lease the leasing company owns the asset.
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The payment is usually lower, but a lower payment is not a lower price: over the same term a lease can cost more than buying.
What happens at the end of the term?
A $1 buyout lease ends with the equipment yours; a fair-market-value lease, with a choice to buy at market value, renew or return.
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Returning is where costs hide: condition standards, hour or mileage limits and a return fee. Get them in writing.
How much you can lease, and on which structure
The amounts above are the same ladder as a purchase and the outer edges of the network, depending on the funding provider, rather than a range you choose from.
The offer follows
- The vendor quote
- The equipment and its age
- Your bank statements
- Your credit profile
Which structure fits how long you keep it?
Keep it for years
A $1 buyout lease or a financed purchase: the highest payment, and the equipment ends up yours.
Replace it in a few years
A fair-market-value lease: the lowest payment, and the choice to return, renew or buy at the end.
The quote is the real ceiling. How much business financing you can get.
Two questions that set the real price
Match the term to the equipment's working life.
Ask for the total of all payments plus the buyout.
Decisions from some providers the same day, depending on the provider.
Subject to provider approval and document turnaround.
How the cost of a lease is expressed
Cost depends on the provider, the equipment, your credit profile and the term; the provider discloses the payment, buyout and fees in the agreement.
A rate or a fixed cost of funds
On a $1 buyout lease or a financed purchase: the price of owning the asset.
Ends with the equipment yoursA monthly lease payment
On a fair-market-value lease: the price of using the asset for the term.
Can cost more in total than buying
On top of either, depending on the funding provider
- Documentation fee
- Inspection
- Return or disposal fee
- Early termination
On a lease, who pays insurance and maintenance is a contract term.
Compare every payment, plus the buyout or the cost of handing it back, against financing the same equipment.
See a financed-purchase exampleA lease example
A print shop leases a $40,000 press at fair market value. The payment is lower than financing it, but the total can be higher. Illustrative example, not an offer.
On tax
Leases and purchases are taxed differently — consult your tax advisor. Nothing here is financial, legal or tax advice.
Who qualifies for an equipment lease
| 12 mo | time in business |
|---|---|
| $15K | monthly revenue |
| 525 | credit score |
Plus three months of bank statements (four in CA, NY, FL and GA with some providers), a government ID and the vendor quote or invoice.
Some providers consider applications at these minimums. Meeting a minimum does not guarantee an offer.
What strengthens a lease file
The same file as any equipment provider, plus the asset's resale market.
The asset itself.
A late-model machine with a deep resale market; specialized equipment is harder to place.
A credit profile that matches the request.
A personal guarantee is commonly required. Personal guarantees explained.
How to apply for an equipment lease
Checking your options uses a soft credit pull only, so looking does not change your score.
What you'll send
- three months of bank statementsfour in CA, NY, FL and GA with some providers
- A government ID
- A written quote naming the seller, the equipment and the price
Larger amounts usually add
- Financial statements
- Tax returns
Ask in writing before you sign
Which structure, what total with the buyout, which return fees, and who insures and maintains it? How to choose an equipment financing provider.
Get the quote, then apply once
about 5 minutesSay whether you want to own the equipment: it narrows the structures.
Send your documents
Complete months, every page, no screenshots.
Compare lease and purchase offers
same-day decisions from some providersA funding specialist sets each offer side by side:
- Total of payments
- The buyout
- Return conditions
- Early termination
Sign, and the provider pays the vendor
as fast as 6 hours with some providersIts agreement governs the lease.
depending on the funding provider, subject to provider approval and document turnaround.
When a lease is the right tool, and when buying is
Set the working life of the equipment against the life of your need.
| Ask yourself | Lease fits | Buy instead |
|---|---|---|
| Will it be outdated in a few years? |
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| Is the monthly payment the constraint? |
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Will it be outdated in a few years?
- Technology and diagnostic gear that ages fast.
Is the monthly payment the constraint?
- A lower payment now.
- The lowest total cost over the life of the asset.
Better fit elsewhere
- Ownership from day oneUse insteadEquipment financingyou own it from the start
- A defined amount of cash, not one assetUse insteadBusiness term loansanything, as cash, on one schedule
Capital Gurus is never the lessor: the leasing company holds title and its agreement governs the lease.
Leasing next to the other equipment pages
A lease is one way to get equipment working. If owning it, or the age of your business, matters more, start here.
- Equipment financing overview
Buy the equipment instead: you hold title from day one and the provider holds a lien until it is paid off.
- Equipment financing for startups
A young business with a short file: what providers weigh when the equipment carries more of the decision.
Lease or buy, trade by trade: equipment financing for construction companies and contractors, equipment financing for landscaping companies and equipment financing for manufacturers.
Related financing
- business term loans
A fixed amount, repaid on a schedule you can put in the budget.
- SBA loans
Capital Gurus is not an SBA lender; SBA loans are made by SBA-participating lenders.
Equipment leasing questions
In short
An equipment lease pays for the use of equipment while the leasing company holds title. Providers in our network consider up to $500K on the application alone and up to $5M with full documentation, depending on the funding provider. Cost is a monthly payment, plus any buyout. Same-day decisions from some providers, subject to provider approval and document turnaround.
What is the difference between leasing and financing equipment?
Financing buys the equipment: you hold title from day one and the provider holds a lien until it is paid off. A lease pays for the use of it while the leasing company holds title. Leasing usually means a lower payment and a decision at the end.
What is a $1 buyout lease?
A lease written so that you can buy the equipment at the end for a nominal sum, often $1. In substance it is a purchase paid in instalments, much like financing: the structure to ask for when you know you want to own the equipment.
What is a fair-market-value lease?
A lease where the end-of-term purchase price is whatever the equipment is worth at that point, not a figure fixed when you sign. Payments are usually lower than on a buyout structure, but you do not know the buyout price in advance.
What happens at the end of an equipment lease?
It depends on the structure. A buyout lease hands you the equipment for the agreed sum. A fair-market-value lease lets you buy at market price, renew, or return the equipment in the condition the agreement specifies. Return conditions and any end-of-term fee are in that agreement.
Is leasing cheaper than financing equipment?
The monthly payment is usually lower; the total often is not. A lease can include end-of-term charges, so over a full term it can cost more than financing the same purchase. Compare the total of all payments plus any buyout; cost depends on the provider, the equipment, your credit and the term.
Can I deduct equipment lease payments?
It depends on the structure you sign and on your business: leases and purchases are treated differently for tax. Consult your tax advisor before you choose a lease or a purchase on tax grounds. Nothing on this page is tax advice.
Do equipment leasing companies check credit?
Yes. Checking your options through Capital Gurus uses a soft credit pull only, which does not change your score. Some providers in our network consider credit from 525, depending on the funding provider. The equipment itself backs the lease, and a personal guarantee is commonly required.
Can I end an equipment lease early?
Usually not for free. Most leases are written for the full term, and ending one early means paying the remaining payments, a stated early-termination amount or a buyout figure. Ask for the early-termination clause in writing before you sign, because it varies by provider.
Still have a question?
talk to a funding advisorGet the equipment working: see which lease offers fit your business.
about 5 minutes, soft credit pull only · talk to a funding advisor