The estimate amount of time (measured in years) that leased property can be used with maintenance and normal repairs.

The equipment lease broker’s role is to match an equipment buyer with a funding source (lender) to finance the acquisition of desired business equipment. The lease broker builds in a fee (commission) for successfully matching the funding source with the equipment buyer (lessee). This fee is known as a broker fee.

There are over 2,500 companies that provide leases to american businesses. Equipment leasing companies are industrial finance companies, banks, and independent companies, both large and small. Many of these companies specialize in certain equipment or industries. They offer a wide range of services including the provision, maintenance, operation, managing, and re-marketing of equipment.

Fair Market Value (FMV) is the value of the equipment at the end of the lease term which is based upon the economic life of the leased property. It is also measured by the average price a person would pay for the equipment at that given time. The fair market value of the equipment on a lease is not known until the lease is over. At that point, the funding source will research blue book values and call dealers to come to a value conclusion.

A fair market value (FMV) purchase option gives the lessee the option to purchase the equipment on the lease for fair market value, or walk away with nothing. This is also known as a true lease.

Financial statements are statements for a business that provide specific information about its financial position. These statements commonly include: balance sheets, income statements, cash flow statements, personal financial statements, etc. Sometimes these statements will be audited, which means a 3rd party developed them, typically a CPA.

A funding source is a party who provides financing for a lease transaction. The term is most commonly used by equipment lease brokers in referring to lessors, but it can also be used by lessor in referring to those parties who provide lessors with the funds lessors use to purchase equipment.

This clause in the lease states that no matter what happens in the duration of a lease term, the lessee is responsible for all of the lease payments per the lease agreement.