Just as there are different types of equipment leasing schemes, so are there a number of payment options available.

Some of the popular lease payment options are:

Standard lease: As the name suggests, this payment option is amongst the most common and requires upfront payment of the first and last installment while maintaining a level monthly installment scheme throughout the term of the lease. Such terms range between a repayment period of two to five years and also provide various end-of-term buyout options.

Step lease: In this case, the payments scale from low to a normal amount. This type of payment option is best suitable for equipment costing more than $50,000. Step lease also provides various end-of-term buyout options.

Skip lease: The skip lease payment option is designed to ensure that payments are made only during certain months in a calendar year. This payment option is most suitable for businesses having seasonal highs or those that are more cyclical in nature.

Deferred lease: In the case of a deferred lease, the payments are deferred to a set period such that you have enough time to generate income by using the leased equipment and ensure payment of the lease rental.

Most of the above payment options provide end of term buy out options.

Obviously, there are advantages and disadvantages of each of the above repayment options depending on the nature of the business, the quantum of the financing availed, the projected returns from the business (and more specifically, the equipment being leased). Therefore, it is very important to analyze the various payment options in the context of one’s business and income generation strategy and potential.