Financing · Programs
Fair Market Value (FMV) Lease
A Fair Market Value lease is built around flexibility, with lower monthly payments and the choice to purchase, renew or return your equipment when the term ends.
How it works
With a Fair Market Value lease, you use the equipment for a set term and make fixed monthly payments arranged through a third-party financing provider. Because the payments are based on the use of the equipment rather than full ownership, they are typically lower than payments on an ownership-focused structure.
When the term ends you decide what happens next. You can purchase the equipment at its fair market value at that time, continue leasing it, or return it and move to newer equipment.
End-of-term considerations
At the end of an FMV lease you can purchase the equipment at its fair market value, renew the lease for a further term, or return the equipment. The right choice depends on how central the equipment is to your operation and whether you expect to upgrade.
Tax considerations
Certain equipment financing structures may offer potential tax advantages depending on the transaction and applicable tax law. All Asset Leasing does not provide tax, legal or accounting advice and does not guarantee any particular tax treatment. Consult a qualified tax professional about your specific situation.
Frequently Asked Questions
FMV Lease questions
What does fair market value mean at the end of the lease?
It is the value of the equipment at the time the lease ends, based on its age and condition. If you choose to buy the equipment, that value is the basis for the purchase option. We confirm how the purchase option works with the financing provider before you sign so there are no surprises.
How is an FMV lease different from a $1 buyout lease?
An FMV lease is built around use and flexibility with lower payments and end-of-term choices, while a $1 buyout lease is built around ownership. An FMV lease has lower payments because the residual value is not fully financed. A $1 buyout lease has higher payments because you are financing the full value on a path to ownership. We can help you compare both for your situation.
How is an FMV lease different from an operating lease?
Both are use-based leases with lower payments, but an FMV lease centers on the end-of-term choice to buy the equipment at its fair market value, renew or return it. An operating lease is oriented toward using the equipment and then returning or replacing it rather than buying it. We can help you compare the two.
Can I finance used or refurbished equipment with an FMV lease?
Yes. FMV leases can work for new, refurbished and used equipment. The purchase-option assumption is adjusted for the age and condition of the equipment, so older equipment is treated differently than new. We match your equipment to a third-party financing provider that is comfortable with that type and condition.
What happens if I want to upgrade before the term ends?
Many FMV leases support mid-term upgrades. The remaining balance can be rolled into new financing for the upgraded equipment, with adjusted payments. The ability to refresh without unwinding the original financing is one of the structural advantages of an FMV lease. We walk you through the specific upgrade terms a provider offers before you sign.
Are there tax considerations with an FMV lease?
Lease structures can carry different tax considerations. FMV leases are often discussed in terms of how payments are treated. All Asset Leasing does not provide tax, legal or accounting advice and does not guarantee any particular tax treatment. Confirm how an FMV lease would apply to your business with a qualified tax professional.
All Asset Leasing helps businesses nationwide explore equipment financing solutions through third-party financing providers. We do not lend directly or guarantee approval.