A dollar lease—often referred to as a $1 buyout lease—is a type of finance lease that allows a business to purchase the equipment for one dollar at the end of the term. In practical terms, this means your customer effectively gains ownership of the equipment over time rather than returning it. For many businesses, it’s a straightforward way to secure the tools they need while easing the strain on cash flow, since payments are made monthly. By the time the lease ends, the equipment is fully paid off with just one more dollar to finalize ownership.

However, not every customer chooses this path. Some businesses prefer to keep their balance sheets lighter and avoid equipment ownership, especially if they plan to upgrade on a regular schedule. Others may look for different tax advantages that come with fair market value or true leases.

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SOURCE Industry Analysts Inc.