Equipment: To buy, or lease?

According to the Equipment Leasing and Finance Association (ELFA), approximately 80% of U.S. companies lease some or all of their equipment, and there are thousands of equipment-leasing firms nationwide catering to that demand.
So why lease instead of buy your equipment? With a lease, you pay a certain monthly fee for the rights to use the equipment. At the end of the lease, you can return the equipment or choose to buy it outright for a pre-determined amount. Leasing is a great way for businesses to start, grow or expand to get the equipment they need for their businesses, whether it is a dishwasher for a restaurant, dump truck for a construction firm, machine tool or a point-of-sale system for a new retail outlet. We'll get more into why leasing is so popular below, but first you should know about your options when your lease ends.

There are three standard end-of-term options:

Fair Market Value (FMV):

This type of lease may also be referred to as a true or operating lease. It provides several flexible options at the end of the lease such as to return the equipment to the lessor, renew the terms or the option to purchase the equipment at the fair market value. Many customers who purchase equipment that tends to rapidly decrease in value select this equipment lease structure.