Financing (equipment loan)
You own the equipment from day one. Fixed monthly payments over 2-7 years. You claim depreciation and interest deductions. Best when you'll use the equipment for its full useful life.
Capital lease with $1 buyout
Functionally like a loan — you own it at the end for $1. Slightly higher rates than a traditional loan but 100% deductible as a lease expense during the term.
Operating lease / FMV lease
Lower monthly payments, but at term end you return the equipment or buy it at fair market value. Ideal for tech that becomes obsolete quickly or when you want the newest models on a cycle.
Section 179 and bonus depreciation
Section 179 lets you deduct the full purchase price (up to the annual cap) in year one if the equipment is used 50%+ for business. Financed equipment still qualifies — talk to your CPA about timing.
How to choose
Own long-term, high-utilization equipment. Lease anything you'll upgrade in 3-5 years or that will lose value fast. Match the term to the useful life so you're not still paying on gear you no longer use.
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