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Purchase Options

A purchase option at the end of a lease allows companies more flexibility to accommodate any changes to their circumstances over the term of the lease. It gives them the opportunity to choose at the end of the lease term to purchase the equipment, renew the lease, or return the equipment. For more information, please listen to our podcasts, Purchase Options and Benefits of Leasing.

American Packaging Capital, Inc. offers three Purchase Options to help companies meet their equipment needs, business goals, and cash flow requirements:

$1.00 and 10% Purchase Option Leases (Capital Leases)

$1.00 Purchase Option:

The lessee has the option at the end of the lease term to choose to purchase the equipment for $1.00.

10% Purchase Option:

The lessee has the option at the end of the lease term to choose to purchase the equipment for 10% of the original equipment cost.

Also known as capital leases, the $1.00 and 10% purchase options are an attractive option for companies that want the tax benefits of ownership or expect the equipment residual value to be high.

  • Fixed, predictable monthly payments.
  • Preserves cash flow and bank lines of credit for operations, real estate, or other capital expenditures.
  • Can greatly reduce the Cost Recovery Period for equipment.
  • Fully depreciable for tax purposes (under MACRS.)

Fair Market Value Purchase Option

The lessee has the option at the end of the lease term to choose to purchase the equipment for its Fair Market Value. Also known as an operating lease, this can be an attractive option for customers who want to use the equipment without ownership or are expecting a decrease in the equipment's value.

  • Fixed, predictable monthly payments.
  • Preserves cash flow and bank lines of credit for operations, real estate, or other capital expenditures.
  • Can greatly reduce the Cost Recovery Period for equipment.
  • Lease payments are charged to Operating Budget, avoiding Capital Budget constraints.
  • Lease payments are generally lower than all other financing options - and are 100% deductible against taxable income..
  • Operating Lease payments are not an Alternative Minimum Tax (AMT) item.

Frequently Asked Questions

What kind of Purchase Options do you offer?

American Packaging Capital offers three Purchase Options: 10%, $1.00, and Fair Market Value. Because they are options, you are not locked in to purchasing the equipment at the end of the lease term. You can also choose to renew the lease or return the equipment, depending on your company’s needs.


What is the $1.00 Purchase Option?

At the end of the lease, the lessee has the option to purchase the equipment for $1.00. Also known as a capital lease, the $1.00 Purchase Option can qualify for available tax benefits.


What is the 10% Purchase Option?

At the end of the lease, the lessee has the option to purchase the equipment for 10% of the original equipment cost. Lease payments are lower than the $1.00 Purchase Option with the benefit of a fixed, predictable Purchase Option. Also known as a capital lease, the 10% Purchase Option can qualify for available tax benefits.


What is the Fair Market Value Purchase Option?

At the end of the lease, the lessee has the option to purchase the equipment for the Fair Market Value (FMV) of the equipment at that time. Monthly lease payments are generally lower than the 10% and $1.00 Purchase Options. This can be an attractive option for companies who want to use the equipment without ownership.