Equipment Leasing

Description:

  • A long-term agreement to rent equipment.
  • Equipment leases can be structured in many different ways, some of which are almost indistinguishable from an equipment loan.

Pros:

  • More flexible than an equipment loan.
  • Down payment is often lower than on an equipment loan.
  • At end of lease term, company can purchase the leased equipment or obtain a new lease and new equipment.

Cons:

  • More complex than an equipment loan. It is very important to understand the “fine print” in an equipment lease.

Typical borrower:

  • Company with datacenter, laboratory, research and development, manufacturing, or automation equipment.

Typical lender:

  • Specialized technology leasing firms.