Lease One Texas

Types of Leases

Lessor:

The party that ownes the equipment, technically the owner of the asset. ie... Lendor.

Lessee:

The party that will use the equipment, until the term is completed.

Lease:

A legal contract where the owner (lessor) gives another party (lessee) the right to us the equipment for a term of time in exchange for scheduled payments.

FMV - Fair Market Value:

The assesed value of the equipment based on actual market demands.


Purchase Option:
	A residual that allows the lessee to purchase the equipment at the end of the lease. The residual price may be stated at a specific amount or at a fair market value.

True Lease or FMV Lease:
	A lease, is where the lessee has the option to purchase the equipment at the fair market value, renew the lease (payments based of the fair market value) or return the equipment to the lender. A FMV lease provides tax advantages to the lessee as they can fully deduct the lease payments as operating expenses, thus lowering the business taxable income while the owner of the equipment recieves the benefit of the depreciation on the equipment, which allows for lower payments for the lessee.

Certificate of Acceptance:
	A document whereby the lessee acknowledges that the equipment has been delivered, installed correctly and is acceptable for use.

Residual Value:
	The current value of a asset at the end of the lease term.

$1.00 Buy-out:
	The agreed upon amount the lessee will pay the lessor at the end of the lease.

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