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What is a Fair Market Value Lease?

A Fair Market Value Lease, Lease-to-Own, can be preferred by some businesses, in part because of its flexibility. Customers often select a Fair Market Value Lease because the equipment purchased will rapidly lose value once it is placed into operation. Also, customers may want to hedge whether there is a need to own the equipment in the future. A Fair Market Value Lease is very similar to a car lease.

A Fair Market Value Lease provides the following benefits:

1. Offers the lowest monthly payments. The FMV lease is ideal for customers that want the lowest possible payments and are unsure if they want to acquire the equipment at the end of the lease.

2. Provides tax incentives. Businesses may be able to deduct the monthly lease payments as an operating expense. This is because in most cases the business will not be the owner of the equipment, the business will be renting it.

3. Provides the greatest flexibility at lease end. At the end of the FMV lease, a customer can decide to return the equipment, continue to make payments to us and use the equipment per the agreement, purchase the equipment, or upgrade with newer equipment.

4. Off-balance sheet. Often this type of financing will not show up on the borrower’s financial statement, since the customer is not the owner. As a result, a company can comply with bank covenants and other borrowing constraints.

If you have any questions regarding the Fair Market Value Lease, please contact us today at 800-994-3415.

NOTE: There is no relation between the the FMV Price and the FMV Lease Product. Residuals are based on hours, asset, and age of the equipment