Term Loans: Traditional loans where the borrower receives a lump sum and repays it over a fixed period with interest. The equipment serves as collateral.
Equipment Financing: Similar to term loans but specifically tailored for purchasing machinery and equipment. The equipment itself usually serves as collateral, which can make it easier to secure financing.
Operating Lease: Similar to renting, where the lessee pays to use the equipment for a specified period. At the end of the lease, the equipment is typically returned unless there's a buyout option.
Finance Lease: Structured like a loan with lower monthly payments. The lessee may have the option to buy the equipment at the end of the lease term for its residual value.
Allows a business to sell its owned equipment to a leasing company and then lease it back. This frees up capital while maintaining use of the equipment.