Built for the asset,
not the balance sheet.
The most flexible lease structure in equipment finance. Low monthly payments, upgrade options at term end, and maximum tax efficiency.
How FMV Lease
works.
- →Low monthly payments — typically the lowest payment of any structure
- →Option to purchase at fair market value, renew, or return at term end
- →Tax-advantaged: payments typically fully deductible as operating expense
- →Preserves credit lines and keeps equipment off the balance sheet
- →Terms from 24 to 84 months; most labs and manufacturers choose 36 to 60
- →Available for equipment from $30,000 to $5,000,000+
This program fits
these situations.
Not sure if FMV fits your deal? Call (866) 545-3273 or apply and we'll recommend the right structure after reviewing your situation.
FMV Lease,
answered.
What is the difference between an FMV lease and a $1 buyout?
In an FMV (fair market value) lease, you have the option at term end to return the equipment, renew the lease, or buy the equipment at its then-current fair market value. In a $1 buyout, you automatically own the equipment at term end for $1. FMV has lower monthly payments because the residual value is not financed; $1 buyout has higher payments because the full cost is amortized. FMV is the right choice when you want flexibility or expect to upgrade. $1 buyout is the right choice when you intend to own the equipment long-term.
How is the fair market value at term end determined?
Most FMV leases include a defined range for the buyout (commonly 10 to 25% of original cost, sometimes capped by a "stated FMV" agreed at lease signing). At term end, the lender provides a buyout quote, you decide whether to purchase, return, or renew. We always confirm the FMV range upfront so there are no surprises.
Are FMV lease payments tax-deductible?
Typically yes. FMV lease payments are usually treated as operating expense and fully deductible in the year paid. This is different from a $1 buyout (which is treated as a purchase, with depreciation and Section 179 instead of payment deductibility). For most businesses, the operating-expense treatment of FMV results in cleaner tax handling. Consult your CPA for your specific tax situation.
Can I finance used or refurbished equipment with an FMV lease?
Yes. FMV leases work for new, certified refurbished, and used equipment. The residual assumption is adjusted for equipment age and condition. Older equipment typically has a smaller residual percentage, which means the FMV payment is closer to the $1 buyout payment. Lender selection matters here — we route deals to lenders comfortable with the specific equipment type and condition.
What happens if I want to upgrade mid-lease?
Most FMV leases support mid-term upgrades. The remaining lease balance is rolled into the new lease for the upgraded equipment, with adjusted payments. This is one of the structural advantages of FMV over $1 buyout — you can refresh equipment without unwinding the original financing. We will walk you through the specific upgrade terms before lease signing.
Ready to apply?
Start the application and we'll match this structure to the right lender within 24 hours.