Frequently Asked Questions

Find the answers to many of your leasing questions right here.

Q: What exactly is equipment leasing?

A: An equipment lease is a contract for the use of a specific piece (or pieces) of equipment for a specific period of time (generally 24 - 60 months), at a fixed monthly payment amount, which is agreed upon in advance.

Q: Why should I lease equipment rather than purchase it outright?

A: You don’t pay your employees a year’s salary in advance—you pay them as they contribute. It should be no different with a contributing asset like business equipment. Leasing allows you to pay as you use the equipment, not before. This way, you can start generating income from the use of the equipment before making your first payment.

Q: Does equipment leasing provide tax benefits to my business?

A: A true lease structure is generally advantageous to most businesses in that monthly lease payments can often be deducted as an operating expense, thus reducing your taxable income. (Consult your tax advisor.)

Q: What type of equipment can be leased?
A: The most common types of equipment available under our leasing program include (but are not limited to) the following: computer equipment with software; medical equipment; office equipment and furniture; manufacturing and industrial equipment; materials handling equipment; and construction equipment. Ask your banker or leasing representative about your specific need.

Q: How will I know if I qualify for a lease?
A: We will consider an established business with a good credit record that has been in existence for a minimum of two years. However, all leases are subject to approval, including credit approval.

Q: What types of leases are available?
A: There are many types of leases with varying payment structures. The three most common types are outlined below. We also offer special lease options for commercial vehicles. (Please note: Vehicle leasing may not be available in all states.)

Fair Market Value Lease (FMV)
Also known as a “true lease,” this option is the most popular among today’s businesses. It offers low monthly payments and, when the lease ends, you may choose from a variety of options, including:

• Purchasing the equipment at the then-determined fair market value
• Re-leasing the equipment at a fair rental value
• Continuing to lease on a month-to-month basis
• Returning the equipment

10% Fixed Price Purchase Option Lease
This plan guarantees the end-of-lease purchase price. Of course, you may choose to return the equipment. The 10% purchase option plan offers end-of-lease flexibility while it pre-determines the residual value of the equipment.

$1 Out Purchase Option Lease
At the end of the lease term, ownership of the equipment is transferred to you for only $1.

Q: What happens at the end of the lease?
A: That’s up to you and the type of lease you select. See the answer to the previous question for possible end-of-lease options.

Q: How will I know if my business will benefit from a lease?
A: Simply ask yourself the following questions. If you answer “yes” to any of them, your business may benefit from an equipment lease.

• Am I planning to update my equipment or expand my office or production facility?
• Would consolidating all of my equipment purchases on one invoice help minimize my administrative burden?
• Would protection against equipment breakdown or obsolescence be helpful to me?
• Would I prefer to invest in this piece of equipment without incurring any out-of-pocket expense?

Q: How will I know if a lease is the right choice for my business?
A: If any or all of the following describe your situation, leasing may be right for you:

• The equipment your business needs will become obsolete in a few years
• You are looking for a more efficient way to manage cash flow or conserve capital
• Your company is looking for off balance sheet financing and tax advantages
• You are looking for 100% cost coverage (“soft” costs)