In a true or operating lease, the leasing company retains ownership of the equipment during the lease. True or operating leases typically have no predetermined buyouts; customers usually classify these payments as an operating expense.
Lower payments and typically the most tax-friendly form of leasing, Additionally, true or operating leases offer three choices at the end of your lease: 1. Return the equipment to the leasing company, 2. Purchase the equipment at its fair market value or option amount, or 3. Extend your lease term.
The full purchase price plus interest charges are spread over the length of the lease.
You will own the equipment at the end of the lease for a minimal amount, such as a fixed percentage of the original cost or $1.00.
You specify months when no payments are made.
Flexibility to adjust to irregular cash flow.
The equipment you need can be acquired with little to no money up front and no payments for 2-3 months.
Payments increase according to a regular schedule over the life of the lease.
Payments can start lower and grow to match business growth as new equipment increases cash flow.
Separate lease schedules are created to accommodate the addition of equipment over that period of time. The master lease governs the basic terms and conditions. Each schedule may include different end of term options and different lease lengths but all will come under one "Master Lease."
Acquiring additional equipment is made more convenient.
The tax structures and details of municipal leases vary considerably from standard business leases. Seek the advice of your financial advisor to better understand your municipal lease options.
Municipal leases are designed specifically for local and state government organizations.