Understand the types of equipment leases.
Choose the right structure for your business.

A capital lease generally transfers substantially all risks and benefits of ownership to the lessee and may be suitable when long-term equipment ownership is the goal.

Support upgrades, expansion, seasonal operations, and working capital needs

Often treated like a long-term liability for accounting purposes

Useful for businesses planning to keep equipment long term

An operating lease does not transfer substantially all ownership risks and benefits and is often used when a business needs equipment for a shorter portion of its useful life.

May support operating-expense treatment depending on structure

Can include fair market value purchase options

Useful when flexibility or equipment turnover matters

A stretch lease spreads approved financing over an extended period to help reduce monthly payments, with options to extend or purchase at the end of the primary term.

Designed to lower monthly payment pressure

Can support early purchase flexibility

Useful when payment size is a key decision factor

A skip payment lease lets businesses avoid payments during slower periods of the year by matching the payment stream to seasonal revenue cycles.

Helpful for seasonal businesses

Can reduce pressure during slower months

Useful for construction, landscaping, agriculture, and seasonal operations

A step payment lease allows payments to increase or decrease over time, helping businesses align lease costs with expected revenue patterns.

Step-up leases begin lower and increase over time

Step-down leases reduce payments periodically

Useful for irregular or ramping revenue streams

A master lease allows a business to add future equipment under the same basic terms and conditions without renegotiating a new agreement from scratch.

Useful for businesses planning multiple purchases

Can simplify future equipment acquisition

Supports capital infrastructure expansion

A sale and leaseback lets a company sell owned equipment for cash and lease it back, freeing up capital while continuing to use the asset.

Can strengthen working capital or balance sheet liquidity

Allows continued use of the equipment

Useful when cash is tied up in existing assets

A lease line of credit combines equipment needs under a single pre-approved facility, making it easier to acquire equipment as needs arise.

Useful for ongoing equipment purchases

Can support multiple acquisitions under one facility

Helpful for businesses planning growth or fleet expansion

Lease financing may also support qualifying leasehold improvements and infrastructure development such as retail remodels, franchise upgrades, plant expansion, or office expansion.

Supports business location improvements

Useful for franchises, retail, offices, and industrial sites

Can preserve cash during renovation or expansion