Beneficial Capital offers two general types of lease structures: True Lease (Fair Market Value) and Dollar Purchase Option.

True Lease (FMV)
This lease is a good option for our customers who want to own or upgrade their equipment at the end of their lease. Monthly rental payments are made over the life of the lease contract. The most common terms are 36, 48, or 60 months. The term is selected by the lessee (user of equipment).

At the end of the lease term, our customers have three options:

1. return the equipment
2. purchase the equipment at Fair Market Value not to exceed 10% of the original equipment cost, or
3. renew the lease for an additional 1-year term.

The prominent benefit of the True Lease Structure is the possible tax savings. It is our understanding that because the title of the equipment does not automatically transfer to the lessee at term end, and, because there is no guaranteed bargain purchase option, the monthly payments plus the sales/use tax can be tax deductible.

Dollar Purchase Option (Conditional Sales Contract)
This lease is designed for customers who know their equipment will not lose value over the life of the lease. Monthly payments are higher than the True Lease because the equipment in essence is "paid off" during the life of the lease, and, therefore, can be purchased for $1 at term end. It is our understanding that this structure, which provides for a bargain purchase option, negates the tax reporting attributes of the lease.