Is a $1 buyout lease the same as a loan?

They behave similarly — you expect to own the equipment at the end — but the contract and accounting can differ. Ask your accountant how each would be treated for your business.

Which one has tax benefits?

It depends on your situation and current tax law. We do not give tax advice. Talk to a tax professional before choosing.

Compare

Equipment loan vs. lease

Same machine, different contracts. Here is how they differ in plain terms.

Landscape business owner leaning on a pickup hitched to an open trailer loaded with two zero-turn mowers — Loaded and ready for the day's route.

	Equipment loan / EFA	$1 buyout lease	Fair-market-value lease
Who owns it during the term	You (lender holds a lien)	Lessor, you expect to buy for $1	Lessor
End of term	You own it	Buy for $1	Buy at fair market value, return, or upgrade
Payment level	Pays off full amount + interest	Similar to a loan	Often lower — you pay for use, not full value
Best fit	Machines you keep for years	Machines you plan to keep	Equipment you replace often (e.g. mowers)
Our calculator	Yes — loan math	No	No

How to choose

Think about how long you will keep the machine. A skid steer or mini excavator that will work for eight seasons often fits a loan. A mower fleet you turn over every few seasons might fit a lease better.

Leases are priced with a lease rate factor and residual value, so a loan calculator cannot estimate them correctly. Use our loan calculator only for loans.