Scenario 1

A contractor wanted to get his skid-steer loader on the job but didn’t have a large down payment. A stated option lease was established, and the customer made payments in advance toward the purchase of the equipment, along with a 15% purchase option at lease end. Under another program, the contractor would have had to pay 15% of the total equipment cost up front before the equipment could be delivered to the job site. By selecting the stated option lease, the contractor maintained cash flow for the duration of the contract while making smaller equal monthly payments. In doing so, he earned enough profits to pay off the 15% lump sum payment due at the end of the lease.