What is an Open End Lease? All You Need to Know About Open End Leases

What is an open end lease? Believe it or not, open end leasing agreements are probably the best possible option for many business owners in today’s market. 

What is an Open End LeaseWith regard to all of the different leasing options facing business owners today, an open end lease is likely going to be the smartest decision to make for commercial businesses.

For every business owner who has ever wondered, “what is an open end lease?”, there is a umber of different kinds of leases to know about – one of which is the open lease.

With an open end lease, the lessee is basically assuming the risk of the equipment items being leased depreciating in value during the leasing term.

If the value of the leased equipment depreciates significantly during the lease term, then the difference must be made up by the lessee. They essentially are assuming the liability in this kind of lease.

What is an Open End Lease?

The reason that this kind of open end lease is actually great for commercial businesses, is that any additional depreciation costs can typically be written off when the business pays their taxes, and so the liability they have assumed can easily be taken care of when taxes are paid.

In addition to the security that businesses will have through tax write-offs, there is always a good chance that the equipment being leased will not depreciate significantly in terms of its immediate value at any given time, so either way a business deciding to enter into this kind of open end lease can be assured that they will likely be protected from any additional cost liability at the end of their leasing term.

Type of Equipment Available for Open End Leasing

When it comes to all of the different business and equipment niches where open end leasing is an appropriate choice, there is a nearly limitless array of different equipment products that are available for open ended leasing.

Even for more obscure businesses, open ended leasing provides a way to get all of the essential equipment items that a business cannot function without, while still being able to save money compared to acquiring your equipment through cash purchasing it.

Some of the more prominent types of businesses who enter into open end leasing agreements include restaurant industry businesses, medical field businesses, dental practices, fitness and gym businesses, and even industries like construction can also be well served by acquiring their equipment through open end leasing agreements.

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Financing Options for Open End Leasing Agreements

Aside from the ever-important method of writing off additional cost liability that could possibly be incurred from an open end lease (in the case that the equipment depreciates significantly during the leasing term) on your business’s taxes, another important financing element of open end leasing is the prospect of taking out loans.

Some lessees will decide that taking out loans is going to be a necessary step for them to take, especially in cases when they need that extra security to insure that all lease payments are made consistently and on time.

To find out more about open ended leasing agreements, and to see if you qualify, simply CLICK HERE to receive a free quote.