Use the equipment now, pay for it monthly, decide at the end
With an equipment lease, a leasing company buys the equipment you choose and lets you use it for a fixed monthly payment. At the end of the term you buy it, return it, renew or upgrade, depending on the type of lease.
How a lease works, step by step
Three parties are involved: you (the lessee), the vendor who sells the equipment, and the leasing company (the lessor) who pays for it.
Which lease fits your plans?
| Lease type | End-of-term option | Monthly payment | Best for |
|---|---|---|---|
| Fair Market Value (FMV) | Buy at fair market value, renew or return | Lowest | Tech and equipment you'll upgrade every few years |
| $1 buyout | Own it for $1 | Higher | Equipment you'll keep for its full life |
| 10% purchase option | Buy it for 10% of the original cost | In between | A lower payment with a known buyout |
| TRAC lease | Pre-set residual for trucks and trailers | Lower | Commercial vehicles |
| Equipment Finance Agreement (not a lease) | You own it from day one | Standard | Owning with fixed loan-style payments |
More detail: types of equipment leases · $1 buyout vs. FMV leases · how an EFA works
How a lease payment is calculated
Payment = equipment cost × lease rate factor. Example only; your rate depends on credit, time in business, equipment and term. Learn more about the lease rate factor and calculator.
Equipment leasing, explained
Funding your equipment.
Your trusted source for business capital.
Why businesses lease equipment
What it takes to qualify
- Active business entity (startups considered)
- Personal guaranty from owners (corp-only available for established companies)
- Minimum 600 credit for smaller deals; 650+ for larger ones
- Vendor quote or invoice
- No bankruptcies in the last 7 years and no unresolved tax liens
- Financial statements for requests over about $250,000
See where you stand with the approval indicator.
Read the end-of-term terms before you sign
Leases can't be cancelled once signed, so match the term to how long you'll really use the equipment. On FMV leases, ask how fair market value is set, what condition the equipment must be in if you return it, and how much notice you must give. Some leases renew automatically month to month if you miss the notice window. Under current accounting rules (ASC 842), most leases over 12 months also show on your balance sheet.
Start a lease in four steps
- Send the quoteFrom any dealer, private seller or auction.
- Apply in minutesA one-page application covers requests up to about $250K.
- Choose your leaseWe show payments for each lease type side by side.
- We pay the vendorUsually 1–5 days after signing and delivery confirmation.
Equipment leasing questions
How does equipment leasing work?
A leasing company buys the equipment you choose and you pay a fixed monthly amount to use it for a set term. At the end you buy, return, renew or upgrade, depending on the lease type.
What is the difference between a lease and an EFA?
With a lease the leasing company owns the equipment during the term. With an EFA you own it from day one and simply repay the financing.
Can I buy the equipment at the end of a lease?
Yes. A $1 buyout lease transfers ownership for $1, a 10% option lease for 10% of the cost, and an FMV lease at fair market value.
Can I cancel an equipment lease early?
Leases are non-cancellable. You can usually pay one off early, and we show you the payoff figure before you sign.
Do I need a down payment to lease equipment?
Often not. Qualified businesses can lease with $0 down; startups and weaker credit may need a down payment or first and last payments.
Are lease payments tax deductible?
FMV lease payments are generally deductible as a business expense, while $1 buyout leases are usually treated as purchases and may qualify for Section 179. Confirm with your CPA.
Ready to lease your next piece of equipment?
Send us the quote and get approved, often by the next day.
Example payments are illustrations only, not quotes. All financing subject to credit approval. Liberty Capital Group, Inc. is not a tax or accounting advisor; consult your CPA. NMLS #2009539 · CA DFPI #60-DBO49692.
Our small business financing experts are available to guide you through the funding Process.
Despite technological advancements, loans, especially equipment financing predominantly involve personal interaction with an underwriter to ensure as fraud prevention. Automation may not suffice, particularly when dealing with a third party like the vendor and the complexities of equipment purchase. In such scenarios, business owners are often better served by collaborating with a Business Loans Broker like Liberty Capital Group, Inc., who can steer them in the right direction.
Instant Quote Online
Use our instant online quote calculator to get an accurate no obligation quote.
Apply Online
Complete our quick online application. Application takes 5 mins.
Review Your Options
We will contact you to review your options.
Get Funds
Money will be deposited in your account in as little as 24 hours.