Own it at the end
for a dollar.
The most ownership-focused lease structure in equipment finance. Fixed monthly payments, full Section 179 deductibility, and a clean transfer of title for $1 at term end. Designed for equipment you plan to keep.
How this program
works.
- →Fixed monthly payments across the full term
- →Ownership transfers at lease-end for $1
- →Treated as a purchase for tax purposes — full Section 179 deductibility in year one (consult your CPA)
- →Available for new, certified refurbished, and used equipment
- →Terms from 24 to 84 months on equipment from $30,000 to $5,000,000+
- →Equipment is recorded on your balance sheet as an asset, with the financing as a liability
This program fits
these situations.
Businesses planning to keep equipment long-term (10+ years of useful life)
Assets with durable residual utility like CNC machine tools, lab instruments, medical equipment
Operators prioritizing the ownership tax treatment and Section 179 deduction
Companies with strong taxable income that benefits from accelerated depreciation
How the numbers
actually look.
Best-case estimate for prime-credit borrower on a $1 buyout lease. Actual monthly payment, term, and tax benefit depend on credit profile, equipment type, and current rate environment. Tax savings shown reflect Section 179 deduction at a 30% effective bracket — consult your CPA for your specific situation.
$1 Buyout vs FMV Lease,
side by side.
| Factor | This Program | FMV Lease |
|---|---|---|
| End of Term | Own for $1 | Buy at fair market value, renew, or return |
| Monthly Payment | Higher (full purchase amortized) | Lower (residual value not financed) |
| Tax Treatment | Treated as purchase. Section 179 deductible. | Treated as operating expense. Payments deductible. |
| Balance Sheet | On balance sheet as asset and liability | Off balance sheet (operating lease) |
| Best For | Equipment you will keep 10+ years | Equipment with upgrade cycles or short utility horizon |
| Ownership Path | Automatic at $1 | Optional buyout at fair market value |
Both structures are valid for most equipment categories. The right choice depends on how long you intend to use the equipment and your tax planning strategy.
Where the $1 buyout
structure fits.
CNC machine tool purchase
Production equipment with 15 to 25 year useful life. $1 buyout preserves the asset for resale or trade later, and the Section 179 deduction can offset a large equipment tax bill.
Long-life lab instrument
A new mass spec or HPLC system that will run validated methods for a decade. Ownership at term end is more valuable than upgrade flexibility for analytical workhorses.
Medical practice imaging equipment
MRI, CT, or ultrasound systems with 10+ year service lives. Section 179 first-year deduction can be significant against practice income.
Heavy construction iron
Excavators, dozers, and loaders hold value extremely well. Owning at $1 means you can sell the iron later and recapture most of the value.
$1 Buyout,
answered.
Why is the monthly payment higher than an FMV lease?
In a $1 buyout, the full equipment cost is amortized across the lease term — you are paying off the entire asset. In an FMV lease, only the depreciation during the term is amortized (the residual value is not included in payments). That means $1 buyout payments are higher month-to-month, but you own the equipment at the end. For equipment you plan to keep, the total cost of ownership is comparable or lower.
Does Section 179 apply to a $1 buyout lease?
Yes. The IRS treats a $1 buyout lease as a purchase for tax purposes (sometimes called a "capital lease" or "EFA" structure). The full equipment cost is eligible for Section 179 expensing in the year placed in service, with current-year limits over $2.5 million for most businesses. This is one of the primary reasons buyers choose $1 buyout over FMV. Consult your CPA on how Section 179 applies to your specific tax situation.
Can I pay off a $1 buyout lease early?
Yes, in most cases. Most $1 buyout leases include a buyout schedule with predetermined payoff amounts at specific dates. Some lenders charge a small prepayment fee, others do not. We will walk through the specific buyout schedule for your deal so there are no surprises.
What happens if I default on a $1 buyout lease?
Same as any equipment financing default: the lender has the right to repossess the equipment and pursue you for any deficiency. Because the equipment is collateral and you have ownership interest, lenders typically work with you on short-term hardship before moving to repossession. Personal guarantees are typically required, so the obligation is yours regardless of business outcome.
Can I finance used equipment with a $1 buyout lease?
Yes. New, certified refurbished, and used equipment all qualify for $1 buyout structures. The lender will assess condition and remaining useful life to make sure the term matches the equipment lifespan. Older equipment typically gets shorter terms (24 to 48 months) while newer equipment can extend to 60 to 84 months.
Other financing
structures.
FMV Lease
Lower payments, upgrade flexibility, off balance sheet. Best for equipment with shorter useful lives or refresh cycles.
Learn more →Operating Lease
Off balance sheet treatment with end-of-term flexibility. Used by covenant-sensitive operators and PE-backed companies.
Learn more →Sale-Leaseback
Already own the equipment? Sell it to a lender and lease it back. Free up 70 to 90% of appraised value in working capital.
Learn more →Ready to apply?
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