Types of Leases
First South Bank Leasing offers a wide
variety of leasing programs to enable your company to
acquire the equipment it needs with the innovative financing
solution that works best for you.
Lease Purchase ($1 Buy-Out)
This plan allows you to buy the equipment at the end
of the lease term for a nominal amount of $1. For
most companies that intend to keep the equipment at
the end of the lease, this is the best option. In essence,
you are building "equity" in the equipment,
so you can also sell the equipment at the end of the
lease or trade it in for the latest technology.
Operating Lease (Fair Market
This structure provides you with the option to purchase
the equipment at the end of the lease for its then Fair
Market Value, continue leasing the equipment based on
its Fair Market Value, or return the equipment. The
payment during the term is lower than on a lease purchase,
but the cost at the end of the lease is higher. In most
cases, there is a "cap" on the Fair Market
Value of 10% of the original cost of the equipment.
Fixed Purchase Option
This option is for those customers that favor
the flexibility of an FMV lease. However want to cap
their equipment buyout at a certain percentage of the
equipment value. 10% is a common buyout option.
This program is attractive to companies in which the
equipment will be used for a project that won’t generate
revenue for a short period of time, possibly three to
six months. The lease is structured so that the initial
months have nominal or no payments.
This lease is designed for those businesses with seasonal
cash flows. We can design a lease where the payments
might be lower during the summer months and higher during
the rest of the year.
Step-up / Step-down payments
This can be structured so that lease payments can be
set up to match a company’s cash flow needs. Payments
can start low and then increase during the later years
of the lease, or payments can start high and then decrease,
minimizing finance charges.
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