Some Step-Leases call for lower payments early in the Lease term and higher payments later. Businesses acquiring more costly or higher capacity equipment than currently needed but who will require greater productivity in the future may find this plan attractive. Rather than installing a smaller unit today and then having to upgrade soon or replace the equipment, reduced front-end lease payments can permit the acquisition of higher capacity equipment at the outset. Conversely, Step-Down leases can allow a faster write-off of leased equipment that will be obsolete in a short period. This structure matches the higher front-end leasing payments to the highest productivity stage of equipment usage.
« Back to Glossary Index
« Back to Glossary Index