Which funding products does this apply to?

Equipment Financing. Each has its own page listing the funders in this directory that offer it and what each one publishes about its terms.

Is this specific to construction?

It is written around how a construction business actually generates and collects cash, which is what makes its funding problem different. The mechanics transfer; the arithmetic may not.

The Find Me Funders research desk. Some drafting is AI-assisted, and every page that is says so at the top, including whether a person has checked its claims yet.

How do I know a figure here is right?

Where a page carries the green notice, its claims were checked against the sources listed at the end and a reviewer is named. Where it carries the amber one, nobody has verified it yet and you should confirm anything you plan to act on.

Are the examples real deals?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What any particular lender charges is on that lender's page, where it publishes it.

Why do you never say what a typical rate is?

Because we cannot source it. A market average assembled from lenders who do not publish prices is a guess with a decimal point on it. Where a lender publishes a figure, we show that figure and say where it came from.

Is this financial or legal advice?

No. It is general information about how these products work. Outcomes depend on your contract and your state, and a lawyer or accountant licensed where you are is the person to ask about your situation.

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$1 buyout vs 10% PUT vs FMV lease: the end-of-term arithmetic

The $1 buyout, the 10% PUT and the FMV lease, compared at the end of the term

Three lease endings, three different amounts of money, and the cheapest monthly payment is not the cheapest deal.

By Find Me Funders research desk Updated 14 September 2026 1033 words 5 min read

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

The monthly payment tells you almost nothing until you know what happens in the final month. Three structures dominate equipment leasing, and they differ mainly in where they put the cost of owning the asset.

The three endings

$1 buyout.You pay a nominal amount at the end and title passes to you. The residual is effectively zero, so the whole cost of the equipment is amortised across the term. Highest payment, no surprises, you own it.

10% PUT.A fixed purchase obligation of ten percent of equipment cost, due at the end. You are not choosing whether to buy; you agreed to buy when you signed. Lower payment than a $1-out because ten percent of the cost is deferred to the last day.

Fair market value.The lessor prices the deal assuming the equipment is worth something at the end — the residual — and only amortises the rest. Lowest payment. At the end you return it, renew, or buy it at a price that has not been fixed.

The arithmetic, done properly

Illustrative only — a $100,000 machine, 60 months, all three structures priced off the same assumed 7% nominal annual rate so the comparison is fair. These are constructed numbers, not quotes.

$1 buyout.About $1,980 a month. Sixty payments is $118,800, plus $1 to take title. Total to own: $118,801.

10% PUT.The $10,000 due at the end is discounted back, so only about $92,946 is amortised into the payments. About $1,840 a month. Sixty payments is $110,400, plus the $10,000 obligation. Total to own: $120,400.

FMV, priced on a 20% residual.About $1,700 a month. Sixty payments is $102,000. Then you decide.

Read those totals again. At the same rate, the 10% PUT costs $1,599 more in nominal dollars than the $1 buyout. That is not a trick — it is what happens when you borrow more money for longer. Deferring $10,000 to month 60 means paying interest on it for 60 months. The lower monthly payment is real, and so is the higher total.

The FMV ending is the one that moves

The FMV lease is $16,801 cheaper across the term than the $1-out. Whether that is a saving depends entirely on the last day.

Hand it back. You paid $102,000 to use a machine for five years and you own nothing. If the equipment would have been worthless or obsolete anyway, that is a clean result.
Buy at FMV. If the machine appraises at $22,000, your all-in cost to own it is $124,000 — more than the $1-out would have been. If it appraises at $14,000, you are at $116,000 and ahead.
Renew. Often the default, and often the expensive one.

You cannot know at signing which branch you land on. That is the entire difference between an FMV lease and the other two: you have bought a lower payment by selling the lessor an option on the residual value.

The notice trap

Most FMV leases require written notice — commonly 60, 90 or 120 days before term end — stating what you intend to do. Miss the window and the lease renews automatically, typically for six or twelve months at the same payment. On the example above, a missed notice on a twelve-month automatic renewal is $20,400 for equipment you had finished with.

Put the notice date in your calendar the day you sign, with a reminder 30 days before it. Send the notice by a method that produces proof of delivery, and address it exactly where the document says notices go.

Which structure fits which situation

Choose a $1-outwhen you will keep the asset well past the term, when the equipment holds value, and when being the tax owner matters to you. Heavy iron, tooling, trailers, anything with a long service life.

Choose a 10% PUTwhen you want a lower payment than a $1-out but you know you are keeping the equipment. Budget for the balloon from day one — it is the payment people forget, and it arrives in the same month as everything else.

Choose FMVwhen the technology turns over faster than the term, when you genuinely expect to hand the equipment back, or when a true-lease rent deduction suits your tax position better than depreciation. Diagnostic and imaging equipment, computing hardware, anything where the model number is the point.

Ending it early, and ending it badly

Two costs sit outside the comparison above, and both land at the end.

Early termination.Illustrative only — walk away from the FMV example at month 40 and a common termination formula asks for the twenty remaining rents, $34,000, plus the booked $20,000 residual: $54,000 to end a lease on a machine that might be worth $32,000. Early termination on an FMV lease is usually close to buying the asset at the worst possible moment, which is why the notice date matters more than the exit clause.

Return condition.Hours caps, wear standards, missing maintenance records, refurbishment and return freight are all chargeable, and they exist because the lessor has to achieve the residual it booked. Suppose the schedule caps usage at 10,000 hours and charges $2.75 for each hour beyond. Being 2,400 hours over is $6,600. Add a refurbishment charge and freight to a location of the lessor's choosing and the cheapest-looking ending has grown a four-figure tail.

Neither charge appears on a payment comparison. Both are in the document, and both are readable before you sign.

What to ask the lessor

What residual are you assuming, in dollars, and is it written into the schedule?
On an FMV ending, who determines fair market value, and by what method?
Is there a cap on the purchase price, or a floor?
What are the return conditions — hours, condition, packing, freight, who pays?
Exactly how many days of notice, and to what address?

Question three matters more than it looks. Some FMV leases include a capped purchase option, which limits what the buyout can cost you and removes most of the uncertainty. Some do not. Ask before you sign, because after signing you are negotiating from nowhere.