This type of lease is primarily designed for businesses who are fairly certain they want to own the equipment after their lease term ends. With a finance lease, you (the lessee) claim ownership of the asset for tax purposes (although the funding source is the actual owner), so you can claim depreciation and interest expense deductions.

Benefits include:

• Full cost of the equipment is rolled into the monthly payments with no residual payment due at the end of the term.
• Low initial payment.
• Allows customers to claim deprecation and interest expense deduction.

At the end of the lease term, the customer may:

• Replace the equipment with new technology and enter into a new agreement
• Purchase the equipment for $1.00