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Don’t Forget! You Saw it in the
Adverti$$er
February 2024 #16295 Page #59
What’s the Difference Between a Lease and a Loan? Carl Villella, CLFP President, Acceptance Leasing & Financing Service
T
he question of what’s the difference between a lease and a loan comes up often, and there are some clear differences that can affect how a client decides to finance their commercial equipment. When a client decides to lease equipment, they make regular lease payments for the right to use the equipment. The equipment is owned by the lessor. If the client can no longer make payments, the equipment is returned to lessor. If the client takes out a loan for the equipment, he/she owns the equipment and makes regular payments to the funder.
When leasing equipment, the lessee has the option to simply return the equipment to the lessor at the termination of the leasing agreement. In the case of a loan, the client intends to own the equipment once all the payments are made. As you can see, a lease builds no equity or ownership in the asset. But if the asset is a rapidly depreciating one (think computers or vehicles), it may make sense to simply “pay as you go” and return it when the term is up. At the conclusion of a loan, the client owns the equipment outright, and can do with it whatever he/she likes. At the conclusion of a lease, the client has a number of options (depending on the lease agreement). The equipment can be returned, as noted above, or it can be renewed for an additional term, or the lessee can exercise the option to purchase the asset at a predetermined or fair market price. Whether you decide to finance your new or used equipment using a leasing agreement or a financing (i.e., loan) agreement, we can help with both! Call us at 412 262-3225 to discuss your options. We look forward to hearing from you! We are Acceptance Leasing and Financing Service, Inc. We are in our 32nd year of business in 2024. Established in 1992, we pride ourselves on our Certified Leasing and Financing Professional designation. We are a member of SBCA and a frequent attendee of the BCMC tradeshows. We can provide financing for any new and, regardless of age, used equipment.
PHONE: 800-289-5627
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