What is a Fair Market Value Lease?

A Fair Market Value Lease is one of the most common leases that businesses select in part because of its flexibility. Businesses often select a Fair Market Value lease if the equipment they are acquiring, such as technology equipment, rapidly loses its value once it is placed into operation.

Here are three things to know about a Fair Market Value (FMV) Lease:

  1. Offers the lowest monthly payments. An FMV lease is ideal for businesses that want the lowest possible payments and are unsure if they want to acquire the equipment at the end of the lease.
  2. Provides tax incentives.  Businesses may be able to deduct the monthly lease payments as an operating expense deduction.
  3. Provides the greatest flexibility at lease end. At the end of a FMV lease a business can decide to return the equipment, continue to pay for and use the equipment per your agreement with the lease finance company, purchase the equipment or upgrade it with newer equipment.

If you have any questions regarding the Fair Market Value Lease, please contact us.

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