FINANCE TYPES

Capital Lease ($1 Buyout)
A Capital Lease allows the lessee to purchase the equipment for a residual ranging from $1 to $101. These leases are typically treated the same as a purchase on tax returns and generally are deducted on a depreciation schedule.

TRAC Lease (Terminal Rental Adjustment Clause)
Typical TRAC Leases have residuals that range from 10% to 20% of the original funded amount. They will also allow for a lower monthly payment when compared to a capital lease.
If setup properly, Trac Leases can offer a full tax write off on the monthly payment.

Fair Market Value Lease (FMV)
Commonly referred to as a “True Lease”, Fair Market Leases offer the option for the lessee to purchase the equipment for the market value at the end of the lease. This may be an attractive option for companies that want to take a specific approach to their tax write offs. FMV Leases can provide a lower lease payment for lessees that have no intentions of keeping the equipment.

Equipment Finance Agreement (EFA)
EFA contracts are best used when it is important to the buyer that they are named the owner of the equipment at the beginning of the term. Payments are typically the same as capital leases. EFA contracts are not always an option that is available for every transaction