|This type of lease is primarily designed for businesses who are fairly certain they want to own the equipment after their lease term ends. With a finance lease, you (the lessee) claim ownership of the asset for tax purposes (although the funding source is the actual owner), so you can claim depreciation and interest expense deductions.
- Full cost of the equipment is rolled into the monthly payments with no residual payment due at the end of the term.
- Low initial payment.
- Allows customers to claim deprecation and interest expense deduction.
At the end of the lease term, the customer may:
- Replace the equipment with new technology and enter into a new agreement
- Purchase the equipment for $1.00