Equipment Lease Types

Type of Equipment Leasing Contracts

Finance leases are the best idea if you intend to keep the equipment at the end of the lease.  The main advantage of this type of lease is that it gives you the option to purchase the equipment for a nominal fee.  Payment terms on finance leases tend to last close to the expected useful life of the equipment.

True Lease
A Lease for federal income tax purposes offering the option to purchase, renew or return the equipment at expiration.

Synthetic Lease

A Lease structured to qualify as an operating lease for financial reporting purposes however, the Lessee is considered the tax owner of the equipment.

TRAC Lease - Terminal Rental Adjustment Clause Lease.  A Lease limited to titled motor vehicles providing the cost advantages of a True Lease with the added benefit of a predetermined purchase provision (which is guaranteed by the Lessee).