Benefits of Buyouts
A lease buyout is the sum of cash that needs to be paid for early termination of a lease and for outright purchase of the item being leased. Lease buyouts are generally of three types: Fair Market Value (FMV), dollar buyout, or a fixed percentage of purchase (often 10%). Discussed below are the types of lease buyouts and their corresponding benefits:
The Fair Market Value Lease is a great option for those who are worried that their equipment procurement may soon become obsolete. On culmination of the term of an FMV lease, a lessee can return the leased item to the lessor, continue with the lease, or purchase the leased item for its FMV worth. A true FMV can give your company tax advantages if it meets the requirements of a true lease. In order to receive these tax benefits for your business, you should seek the assistance of your accountant for careful structuring of the lease purchase. Low monthly payments make this a particularly advantageous option for companies with small budgets.
The $1 purchase option allows the lessee to buy the equipment at lease end for just one dollar. To eventually gain ownership over the equipment without having to incur all expenditures upfront, this option is a valuable decision. Another advantage of the $1 purchase option is the monthly payment plan. Despite the fact that monthly payments for a $1 lease are higher than those for an FMV lease, the $1 lease provides the benefit of owning the equipment for an amazing $1. Thus, through this purchase option, you gain both leasing and ownership advantages.
The 10% purchase option is beneficial if you are uncertain of what your needs may be in the future. You can opt for this purchase option if you desire a set purchase price and if the equipment's useful life is likely to be greater than the term of the lease. The monthly payments for the 10% purchase option are generally smaller than those for a $1 buyout lease and possibly higher than those for the FMV lease. As in the case of the FMV lease, at lease end, you are offered options to return the leased item to the lessor or continue with the lease. The other option you are given is to buy the item for 10% of its original worth.
Lease buyouts offer large amounts of tax advantages and benefits for any sized business. For information on a printer/copier lease buyout, contact JJ Bender at (800) 367-9673.
The Fair Market Value Lease is a great option for those who are worried that their equipment procurement may soon become obsolete. On culmination of the term of an FMV lease, a lessee can return the leased item to the lessor, continue with the lease, or purchase the leased item for its FMV worth. A true FMV can give your company tax advantages if it meets the requirements of a true lease. In order to receive these tax benefits for your business, you should seek the assistance of your accountant for careful structuring of the lease purchase. Low monthly payments make this a particularly advantageous option for companies with small budgets.
The $1 purchase option allows the lessee to buy the equipment at lease end for just one dollar. To eventually gain ownership over the equipment without having to incur all expenditures upfront, this option is a valuable decision. Another advantage of the $1 purchase option is the monthly payment plan. Despite the fact that monthly payments for a $1 lease are higher than those for an FMV lease, the $1 lease provides the benefit of owning the equipment for an amazing $1. Thus, through this purchase option, you gain both leasing and ownership advantages.
The 10% purchase option is beneficial if you are uncertain of what your needs may be in the future. You can opt for this purchase option if you desire a set purchase price and if the equipment's useful life is likely to be greater than the term of the lease. The monthly payments for the 10% purchase option are generally smaller than those for a $1 buyout lease and possibly higher than those for the FMV lease. As in the case of the FMV lease, at lease end, you are offered options to return the leased item to the lessor or continue with the lease. The other option you are given is to buy the item for 10% of its original worth.
Lease buyouts offer large amounts of tax advantages and benefits for any sized business. For information on a printer/copier lease buyout, contact JJ Bender at (800) 367-9673.
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posted by Graphic Savings Group at 6:35 PM
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