Simple interest term loans, secured by the equipment, fixed rate, amortizing.

• $1 Buyout (Capital/Finance Lease): Own for $1 at end.
• 10% Purchase Option: Buy for 10% residual at end.
• FMV Lease (Operating): Option to buy at fair market value, return, or renew.
• TRAC Lease (vehicles): Terminal rental adjustment clause for commercial vehicles.
• Master Lease Line: Preapproved line to draw multiple schedules over time.
• Sale-Leaseback: Turn owned equipment into cash; lease it back.

Auto-renewal at end of term if you don’t give timely return/purchase notice—watch deadlines.

Lessor funds vendor in stages (progress payments) during build/install; you start paying interest/rent on amounts advanced.

Yes—via one schedule or a master lease with separate schedules.

Both are possible; private-party transactions often require inspections, serial numbers, clear title, and proofs of ownership.

Common; expect shorter terms, higher rates, or larger down payments; condition reports may be required.

Lender/lessor listed as lienholder; DMV processing and proof of insurance required.

Loans usually show APR; leases show a payment factor (e.g., 0.020 per $1,000/month). Compare via total cost and implied APR.

Borrower/guarantor credit, time in business, financial strength, equipment type/age, term length, and residual assumptions.

Usually fixed. Seasonal/step payments are sometimes available.

Lower initial (“step-up”) or off-season reductions aligned with cash cycles.

First payment (or advance), documentation fee, UCC filing, titling, delivery/installation, taxes (sometimes financed).

Often yes for hard assets; soft costs/down payment vary by provider.

$150,000 × 0.020 factor ≈ $3,000/month (before tax/fees). Total cost depends on term and end-of-term option.

Commonly ≥2 years for best terms; 6–24 months possible with stronger compensating factors.

Stable cash flow, reasonable leverage, and credit (business & personal). FICO thresholds vary (e.g., 600–700+ helpful).

Often yes for small/mid deals; may be waived with strong financials or higher collateral/residuals.

Bank statements, tax returns, P&L, balance sheet, debt schedule—depth scales with deal size.

For larger or used assets—yes. Serial numbers, photos, and condition reports are common.

Yes—typically a purchase-money security interest (PMSI) or blanket/UCC on business assets.

Quote/invoice with make/model/serials, warranty terms, delivery/installation timeline.

You confirm the equipment arrived, works, and you accept it—often triggers lease/loan commencement.

Progress funding or “interest-only/rent” periods may apply; coordinate with vendor and funder.

Sometimes—either financed with the equipment or kept separate.

Warranties typically remain with manufacturer/vendor; read pass-through terms.

Property and liability, sometimes inland marine; loss-payee/lender’s loss payable endorsements naming funder.

You do; in leases, lessor may pay sales/use tax upfront and bill you monthly (jurisdiction dependent).

You must repair/replace; insurance proceeds generally assigned to restore collateral or pay down the balance.

Obtain funder consent—affects filings, taxes, and risk.

Asset on balance sheet; loan liability amortized; interest expensed.

Under ASC 842/IFRS 16: most leases recognized on balance sheet (ROU asset and lease liability); classification (finance vs operating) affects expense pattern.

Loans and $1 buyout/finance leases often eligible; FMV/operating leases may not be—confirm with your CPA.

Varies by state and lease type; may be financed or billed monthly.

Operating lease payments are typically expensed; finance leases split between interest and amortization—ask your accountant.

• $1 Buyout: Own asset for $1.
• Fixed % (e.g., 10%): Purchase at agreed percentage.
• FMV: Buy at fair market value, return, or renew.
• TRAC: Vehicle residual settlement.

Evergreen renewal may trigger—calendar the notice date and keep proof.

Usually you do; ensure de-install and return conditions are specified.

Sometimes; check for prepayment premiums or yield maintenance.

Often—but early buyout may be based on remaining rent plus residual (not just principal). Get a payoff quote.

Possible—admin fees, residual settlement, remaining rent; read the contract.

Insurance, maintenance, use/location restrictions, financial reporting, no liens/transfers without consent.

Non-payment, uninsured loss, relocation without consent, unauthorized sale, bankruptcy/insolvency, covenant breaches.

Repossession, acceleration, legal action, UCC enforcement, PG pursuit where applicable.

Yes—treatment of leases, taxes, and notices varies. Ensure documents match your jurisdiction(s).

Economically similar; documentation and tax presentation differ. Choose based on total cost, flexibility, and accounting/tax fit.

FMV can lower payments via residual but may cost more if you later buy at FMV; good for tech that refreshes frequently.

If LOC is scarce, equipment funding preserves LOC for working capital. If LOC is plentiful/cheap, compare total cost.

SBA offers longer terms/lower rates but more paperwork/time; 504 is popular for heavy equipment and real estate.

To unlock cash from owned assets; ensure the leaseback terms don’t strain cash flow.

Yes—monthly/quarterly, seasonal/step, or skip payments with approval.

Coordinate filings, taxes, and insurance across locations.

Use a master lease line or add a new schedule to avoid re-underwriting the entire facility.

You do—follow manufacturer schedules; keep records for warranty and resale value.

Many funders finance perpetual licenses, some subscriptions, and implementation costs—confirm asset classification.

Yes—consider cyber insurance and secure disposal protocols at end-of-life.

Model payments vs. incremental EBITDA/gross margin from the equipment. Aim for coverage (EBITDA/Payment) comfortably >1.25×.

Often 0–20% depending on risk, age of equipment, and structure.

Normalize to total dollar cost, implied APR, fees, residual/EOT terms, taxes, and flexibility (prepay, step payments, upgrades).

Utilization rate, throughput/output gains, maintenance costs, downtime, and revenue uplift.

Higher expected residuals can reduce payments (FMV), but confirm you’re comfortable with potential EOT buy price.

Application, IDs/PGs, vendor quote/invoice, 3–12 months bank statements, financials (depth by size), insurance binder.

Simple deals: 24–72 hours post-approval and D&A; complex/custom builds: longer with inspections/progress payments.

Usually vendor (direct pay). Sale-leasebacks pay you; refinances pay off existing liens first.

Progress funding or a small cash deposit from you; align with funder so deposits count toward financed amount.

Must be correct on all docs; mismatches delay funding and UCC filings.

Evergreen auto-renewals without clear notice windows, high documentation/other hidden fees, punitive prepay terms, broad default triggers, and unclear FMV language.

Obsolescence, resale value uncertainty, high maintenance costs, limited vendor support, parts availability.

Underutilization, lack of operator training, skipped maintenance voiding warranty, and inadequate insurance.

Manage aggregate payment load—multiple small schedules can equal one large obligation.

Plan for data sanitization (IT), environmental rules (refrigerants/hazardous materials), and return conditions under leases.

Often favorable terms given high resale and strong cash flows; may require credential proof and facility licensing.

TRAC/balloon options, longer terms, inspections, and robust insurance.

Telematics, mileage limits, DOT compliance, and maintenance records often required.

Higher perceived risk; mitigate with strong bank statements, PG strength, and vendor warranty coverage.

Prefer FMV/operating leases for refresh cycles; confirm data security and return conditions.

Yes—via refinance or early buyout when credit/financials improve.

Yes—establishing a payment history can unlock lower rates and larger lines.

Obtain a UCC-3 termination and any title releases; keep them on file.

Only with lender/lessor consent—proceeds usually must pay down or buy out the contract.

All contracts, D&A, maintenance logs, insurance, and payoff/termination documents.