Have you started to look for Equipment Financing or Leasing and gotten confused by all the different words thrown out there. Words like Fair Market Value, Capital Lease, 10% Buy-outs and other confusing terms?

Securing capital for an equipment purchase is a tedious task in itself. When you throw in some confusing complicated terms, it can become a headache quick.

So what exactly is a fair market value lease?

A fair market value lease is an buyout option that is presented to you at the end of a lease term. FMV leases typically have the lowest monthly payment option because the buyout option is typically more costly than other options like $1 buy outs. Why do they call it a FMV? At the end of the lease term, the amount needed to buy out and purchase the equipment would be the Fair Market Value of the equipment. They determine this by using a complicated method that would bore us all to death.

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If you want to get a better understanding of the types of leases there are out there, check out our Beginners Equipment Finance and Lease guide!

In our Guide, you’ll learn:

• How exactly are lease rates determined?
• What advantages and disadvantages are there to Equipment Financing
• A complete breakdown of the Finance Process from start to finish
• Most common obstacles that arise when trying to get financing in place
• What to look for in a good Equipment Finance company.

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