| Aspect | Equipment Financing | Equipment Leasing |
|---|
| Ownership | Buyer owns the equipment after payments | Lessor retains ownership; lessee uses the equipment |
| Payments | Loan payments; may include interest | Lease payments; typically monthly |
| End of Term | Buyer can keep, sell, or upgrade | Return, renew, or buy at residual value |
| Tax Benefits | Interest deductions, depreciation | Lease payments deductible as business expense |
Equipment financing involves borrowing funds to purchase equipment, giving ownership at the end. Leasing allows use of equipment without ownership, often with flexible terms. The choice depends on whether you want ownership and potential tax benefits or lower upfront costs and flexibility.