Types of Leases
Operating leases, finance leases, and sale-leasebacks — each structured to match your cash flow, tax strategy, and equipment lifecycle needs.
Understanding Your Lease Options
Not all leases are the same. Choosing the right lease structure depends on your cash flow goals, tax strategy, how long you will need the equipment, and whether you want to own it at the end. Access Financial Resources helps you navigate these options.
Operating Lease (True Lease)
An operating lease is essentially a rental. You use the equipment for a set term and return it at the end — or upgrade to newer equipment. Payments are typically lower, and the lease may stay off your balance sheet.
Best for: Businesses that want lower payments, like to upgrade frequently, or do not need to own the equipment long-term.
Finance Lease (Capital Lease)
A finance lease is structured like a purchase loan. You make fixed payments over the term with the intent to own the equipment at the end (often for $1 or 10% of original cost). The asset and liability appear on your balance sheet.
Best for: Businesses that want to own the equipment and take advantage of depreciation deductions.
$1 Buyout Lease
You make fixed monthly payments and purchase the equipment for $1 at the end of the term. Economically similar to a purchase, with 100% financing and no balloon payment.
Best for: Businesses that are certain they want to own the equipment and want simple end-of-term terms.
Fair Market Value (FMV) Lease
At the end of the term, you have the option to buy the equipment at its then-current fair market value, return it, or extend. This structure offers the lowest monthly payments of all options.
Best for: Businesses prioritizing cash flow flexibility and equipment upgrades.
TRAC Lease (Terminal Rental Adjustment Clause)
Used primarily for over-the-road vehicles and transportation equipment. Payments are structured around an agreed residual value, and there is a settlement at the end of the term based on actual sale price.
Best for: Transportation companies and fleets managing vehicles under DOT regulations.
Municipal / Tax-Exempt Lease
Available to qualifying government entities, schools, and nonprofits. Structured as an installment purchase with interest that may be exempt from federal taxes, resulting in lower effective rates.
Best for: Government agencies, school districts, municipalities.
Not sure which type is right for you? Contact us — we will walk you through the options at no charge.