This Silverport Capital article helps owners in Wenatchee, Washington and across Chelan County, WA decide whether to lease equipment or buy it with a loan: how $1 buyout and fair market value leases work, examples for a landscaper, a restaurant, a hotel, a home builder and an auto shop, and the numbers to compare.
Own It From Day One or Pay to Use It: The Core Trade-Off
With an equipment loan, title sits with the business from the first payment, and the partner's lien comes off after the last one. A lease leaves the lessor as owner and ends with a choice: buy the equipment, return it or renew. A $1 buyout lease ends in ownership for a dollar; a fair market value (FMV) lease ends with an option to buy at market value. The comparison that settles it is the total cost, every payment, fee and buyout, set against how long the business will use the equipment. The equipment financing page covers both forms.
Leasing landscaping equipment in Chelan County, WA: mowers, trailers and skid steers
Landscaping services counted 68 employers in Chelan County, WA in 2023 (County Business Patterns, 2023 data, U.S. Census Bureau). A landscaper running mowers hard for a few years and trading them in may prefer an FMV lease; one running a skid steer and trailers for a decade may prefer a loan or a $1 buyout lease.
- Mowers on a replacement cycle: FMV lease worth pricing.
- Skid steers and trailers kept for years: loan or $1 buyout.
- Trucks: either, depending on mileage plans.
How an equipment lease works for a Chelan County, WA restaurant's dish machine
Illustration only, invented figures: a restaurant's dish machine on an FMV lease at $245 a month for 48 months totals $11,760 in payments (our arithmetic), and at the end the restaurant can return it for a newer model. Some dish machine leases bundle service and chemicals into the payment; compare those against buying the machine and paying for service separately.
Leasing a Wenatchee, WA hotel's laundry: payments, term and the end of the lease
A hotel laundry is a long-lived purchase that a property runs until it wears out, which points to a loan or a $1 buyout lease. The lease's payment, term and end-of-term options are written into the agreement; read the end-of-term clause before signing, since automatic renewal at the same payment can follow if notice is not given.
The hotel loans page covers FF&E and laundry alongside working capital.
A $1 buyout lease for a Chelan County, WA home builder's excavator
Illustration only, invented figures: a home builder's $68,000 mini excavator on a $1 buyout lease at $1,390 a month for 60 months costs $83,401 including the buyout (our arithmetic). A loan for the same price at an assumed 10% annual rate over 60 months is about $1,445 a month and $86,688 in total (our arithmetic). Set the two totals side by side, fees included, for a machine the builder will keep.
Residential building contractors counted 161 employers in Chelan County, WA in 2023 (County Business Patterns, 2023 data, U.S. Census Bureau). The contractor financing page covers draws and retainage.
Leasing a tire machine or lift for a Wenatchee, WA auto shop
A tire machine or lift for an auto shop is durable and kept for years, which favors buying. Diagnostic tools and ADAS calibration equipment are replaced on a shorter cycle and can suit a lease that allows an upgrade. Auto repair and maintenance counted 53 employers in Chelan County, WA in 2023 (County Business Patterns, 2023 data, U.S. Census Bureau).
Illustration only, invented figures: an FMV lease on a $68,000 machine at $1,080 a month for 60 months totals $64,800 in payments; buying it at an assumed $21,000 market value at the end brings the total to $85,800 (our arithmetic).
The Numbers to Put Side by Side
| Item | Loan | $1 buyout lease | FMV lease |
|---|---|---|---|
| Monthly payment | From the offer | From the offer | From the offer |
| Upfront cash | Down payment | First payment and fees | First payment and fees |
| End of term | Lien released | Pay $1, own it | Buy at market value, return or renew |
| Total cost | All payments and fees | All payments, fees and $1 | All payments and fees, plus purchase if bought |
Tax and Accounting Questions
Leases and loans are recorded differently, and the tax treatment of each depends on the lease type and the business's situation. Those questions belong with the business's accountant before signing, not after.
Equipment Inside a Bigger Project: Where a Term Loan Takes Over
When equipment is part of a larger project, such as a kitchen remodel with new equipment, a term loan can fund the whole project at once. Splitting the equipment out onto a lease or equipment loan can still make sense when the equipment's life differs from the rest of the project's.
A Checklist Before Signing
- Get the total of every payment and fee.
- Read the end-of-term clause and any notice deadline.
- Confirm who maintains and insures the equipment.
- Check whether the lien covers only this equipment.
- Ask about early buyout terms.
Elsewhere on silverportcapital.com: the articles and the request form.
By Silverport Capital · Updated
