Canadian Equipment Financing Buyouts
One of the games lease companies play is to charge a business for the one dollar buyout at the end of the lease as they don’t make very much money on this type of lease even though they have no reseller risk in terms of market price and ease of liquidity.
Instead, many Canadian equipment financing companies push better rates at leases with end of term balloon payments of 10% or higher.
This is a huge benefit for the financing company as the balloon payment earns interest for the full term of the lease.
If the client doesn’t want to pay balloon, they can go with a fair market value option which will be an even large buyout amount.