Leasing & Financing FAQs

Organizations should evaluate factors like cash flow priorities, ownership objectives, tax strategy, and how long the equipment will be used. Leasing can help reduce upfront costs, preserve working capital, support access to updated technology, and align payments with the asset’s useful life.

Equipment leasing typically offers faster approvals, no covenants or blanket liens, and more flexibility in structuring terms than traditional bank loans.

Equipment leasing can help provide predictable payments, align costs with equipment usage, and preserve borrowing capacity for other priorities.

Equipment lease approvals may consider factors such as an organization's time in operation, financial profile, payment history, type of equipment, and size of the transaction.

First American can often deliver a credit decision in as little as two business days for qualified projects that meet client and transaction criteria.

An equipment lease can help preserve cash flow by spreading costs over time instead of requiring a large upfront payment. Key considerations include monthly payment amount, term length, payment timing, and how well payments align with revenue or usage cycles.

Lease terms typically range from 24 to 84 months, depending on the asset type, industry, and project scope. 

A finance lease generally resembles ownership, while an operating lease is often structured more like a rental with greater end-of-term flexibility. Under ASC 842, leases are classified as finance or operating based on factors such as ownership transfer, lease term, purchase options, and the present value of payments.

Under ASC 842, leases are classified as finance or operating based on ownership transfer, lease term, purchase options, and the present value of payments. These criteria determine balance sheet treatment and financial reporting.

A loan typically results in immediate ownership, with the asset recorded on the balance sheet and depreciation recognized over time, while a lease may or may not result in ownership depending on the structure and end-of-term options. The right choice depends on cash flow objectives, tax strategy, and long-term capital planning. 

Yes, depending on the lease provider. First American offers up to 100% financing, which can include soft costs such as installation, delivery, software, and training—allowing total project costs to be bundled into one predictable payment.

Yes, equipment leases can support mid-term upgrades and evolving project needs through flexible structures like Fair Market Value (FMV) leases and lease lines. Lease lines can simplify add-ons by allowing new equipment to be added over time under an established agreement, rather than starting a brand-new contract for each transaction. 

Yes, a sale leaseback (also known as a cash reimbursement) allows an organization to sell owned equipment to a lessor and lease it back while continuing to use the asset. This creates additional liquidity that can be used to reinvest in other areas of the business.

Equipment financing may provide tax benefits through depreciation deductions or lease payment deductions, depending on structure, asset type, and tax position. Organizations should consult tax advisors to evaluate specific outcomes.

Key considerations include cash flow priorities, balance sheet impact, tax strategy, asset lifecycle, flexibility needs, and long-term capital planning goals.

First American offers a wide range of leasing and financing structures, including: 

• Fair Market Value (FMV) Lease: Pay for use rather than ownership, with options to extend, return, or purchase the equipment at lease end.
• Fixed Purchase Option Lease: Lease equipment with low monthly payments and a known buyout cost upfront, with options at lease end to purchase or extend.
• Lease Line: Bundle multiple projects into a single lease line of credit.
• $1 Buyout Lease: Own the equipment for $1 at the end of the lease term.
• Tax-Exempt Lease: Finance equipment at low tax-exempt rates for nonprofit organizations.
• TRAC Lease: Lease commercial vehicles with the option to purchase for a predetermined value at the end of the lease.
• Sale Leaseback: Refinance recently purchased equipment and receive up to 100% of the original purchase price.

Organizations often use centralized lease and asset management systems to track equipment by location, department, serial number, and contract terms. At First American, clients have access to an online account platform with real-time asset visibility, customizable reporting, and tools to manage leases across locations.

Asset tracking and reporting are usually managed through a centralized system that provides visibility into leased assets, locations, and contract details throughout the lease term. Some organizations use internal tools, while others use platforms provided by their leasing company. First American offers an online account with customizable reporting, API integration, and the ability to view and update assets by serial number, location, lease number, and description.

At the end of a lease, end-of-term options give organizations flexibility to manage costs and choose the best path for the equipment’s next stage. Depending on lease structure, options may include:

• Returns: An option for equipment that’s ready to be replaced or refreshed. The lessee should confirm condition requirements, packaging standards, and any fees for excess wear, and plan logistics early.
• Extensions/Renewals: A way to keep equipment in place longer without starting a new procurement process. Most leases require advance notice (often 30–90 days), and terms may be more favorable when planned ahead.
• Buyouts: A good option when the equipment still meets operational needs and ownership makes sense. Review the contract’s purchase option and fair market value, then evaluate whether keeping the asset aligns with future plans. 

Equipment returns at the end of a lease are typically managed through a structured process that includes verifying the asset’s condition against the leasing provider's standards, completing documentation, and ensuring data security for IT equipment. After approval from the leasing provider, the asset is packaged and shipped to the designated return location. The equipment is inspected and any applicable charges are reviewed and resolved.

Normal wear and tear generally means the equipment functions as intended and has no cosmetic wear that would impact resale value.

If leased equipment is not returned at end of term, most providers assess charges based on the value defined in the lease agreement, often fair market value. At First American, any missing equipment identified during the return audit is typically billed at fair market value.

In some leasing arrangements, providers may consider accepting functionally equivalent replacement equipment, subject to condition standards and contractual review. At First American, like-for-like substitutions may be accepted if the replacement equipment is functionally equivalent, in comparable condition, and approved as part of the return review process.

First American primarily serves middle-market and large organizations, including investment-grade and publicly traded entities, supporting projects ranging from approximately $100,000 to $100 million or more.

First American supports organizations across a wide range of industries, including healthcare, education, nonprofit, manufacturing, food and beverage, logistics and distribution, technology, life sciences, power and utilities, dental, and professional services.

First American works with organizations in regulated and equipment-intensive industries by structuring transactions that reflect industry-specific requirements, asset characteristics, and compliance considerations. Experience within specialized sectors helps anticipate documentation needs, equipment standards, and operational constraints.

An industry-focused financing provider like First American understands sector-specific equipment lifecycles, regulatory environments, and budgeting practices. This insight can help support more aligned structures, smoother execution, and long-term equipment planning.

First American is one of the largest equipment finance companies in the U.S., offering a highly tailored leasing experience supported by dedicated service teams and digital account management tools. As a wholly owned subsidiary of City National Bank, an RBC company, First American combines industry specialization with personalized support and flexible lease options.

Yes, First American supports eligible equipment financing transactions across the U.S. and Canada, subject to credit approval and operating requirements.

Yes, First American can work with international vendors to finance equipment for U.S.-based lessees, subject to credit approval and transaction requirements.

First American's lease terms can be structured to align with equipment lifecycles, budget cycles, and end-of-term preferences, including options for extensions, returns, or purchases.

Yes, First American supports complex, multi-location projects with a dedicated Project Manager, digital lease management tools, and coordinated support from rollout through end of term.

Commonly financed technology includes computers and laptops, tablets, smartphones, printers and copiers, servers, networking equipment, phone systems, security systems, and related infrastructure.

Technology financing helps spread costs over time rather than requiring a large upfront payment. This approach can help preserve working capital, align expenses with useful life, and support more predictable budgeting.

Organizations can use technology financing to spread hardware costs over predictable monthly payments, helping preserve working capital while maintaining access to the latest equipment.

Operating leases give organizations the flexibility to upgrade equipment at the end of each term, helping keep technology aligned with performance requirements and lifecycle expectations.

Financing can support ROI by preserving working capital and enabling faster deployment of technology. First American works with organizations to structure financing that aligns technology investment timelines with operational and budgeting priorities.

Financing can help organizations deploy cybersecurity tools, monitoring services, and infrastructure upgrades without delaying implementation due to budget timing constraints.

Leasing programs can cover laptops, software, networking equipment, and cybersecurity tools under a single payment structure, helping organizations spread deployment costs over time rather than requiring large upfront capital outlays.

Technology financing terms typically range from three to five years, depending on asset life and refresh strategy.

End-of-term options vary depending on the lease structure. Many First American clients use operating leases for technology projects, which provide options to return, extend, or purchase the equipment at the end of the term—supporting a disciplined refresh cycle.

Many software applications and software-related costs may be eligible for financing, including SaaS subscriptions, annual renewals, enterprise agreements, cloud infrastructure, ERP and CRM systems, cybersecurity tools, and data platforms. Implementation, integration, training, deployment, data conversion, configuration, and third-party development services can often be included as part of the overall financing structure.

Yes, software-only projects can often be financed without hardware or physical equipment. Eligibility depends on factors like term length, project scope, and credit profile. First American can support both hardware-bundled and software-only initiatives.

Equipment financing companies like First American often have broader flexibility to finance both software and the related costs required to deploy it. Unlike many traditional lenders, they can include implementation, integration, training, and other project services alongside software licenses. They can also bundle software with hardware and infrastructure into a single financing structure, helping organizations manage complex technology projects under one agreement.

Financing for large software initiatives can be structured to spread payments over time rather than paying upfront. This can include subscription-based software, annual renewals, and implementation services—helping align payments with usage and internal budget cycles.

Yes, financing can be structured to support multi-year implementations and phased rollouts, with funding aligned with vendor invoices, annual renewals, project milestones, or rollout phases. Implementation and related services may be financed over a longer term than the subscription period, depending on the project.

Software financing helps convert large, upfront costs into predictable payments over time. This approach can help preserve capital, reduce budget spikes from one-time software or implementation costs, and improve budget flexibility for long-term technology initiatives.

Financing can help organizations manage rising SaaS and cloud costs by spreading subscription fees and annual renewals over a defined term. This helps create more predictable budgeting—even as usage grows, renewal costs increase, or pricing models evolve.

Software financing terms often range from 12 months to 3–5 years, depending on the agreement and what’s being financed. Many First American clients align annual subscription renewals to a 12-month structure, while implementation, deployment, and related services may be financed over a longer term based on scope and credit profile.

Medical equipment financing allows healthcare organizations to acquire essential equipment by spreading payments over time instead of paying the full cost upfront. This includes options such as Fair Market Value (FMV) leases, $1 buyout leases, and tax-exempt financing.

Hospitals choose leasing as a practical way to modernize essential clinical equipment while managing financial and operational pressures. Financing can help:

• Improve financial flexibility by allowing hospitals to align equipment costs with utilization and revenue, helping them respond more effectively to fluctuating patient volumes and service-line demands.
• Extend capital budgets by replacing large upfront costs with predictable monthly payments, allowing funds to stay focused on staffing, patient care, and facility needs.
• Support clinical quality and regulatory compliance by enabling hospitals to refresh rapidly evolving technologies such as imaging, patient monitoring, and lab devices at regular intervals.

A few ways healthcare organizations can secure more competitive terms include leveraging group purchasing organizations, requesting bids from multiple funding sources, and evaluating the total cost of ownership across various financing structures.

Bonds can provide nonprofit healthcare organizations with a cost-effective solution for long-term improvements while equipment leasing is typically better for shorter-lived assets such as technology, medical equipment, and furniture. Equipment leasing can help providers: 

• Lower overall interest costs
• Align financing with asset useful life
• Receive approval and funding within days rather than months
• Avoid additional collateral requirements, covenants, and hidden fees

Healthcare organizations use $1 buyout and FMV leases to acquire medical equipment. Typically $1 buyout leases are chosen for equipment expected to stay in service long-term, while FMV leases are used when equipment will be replaced regularly.

First American offers financing for a wide range of medical equipment, including:

• MRI, CT, PET
• Linear accelerators
• Robotic surgery systems
• Infusion pumps
• Digital mammography
• Ultrasound equipment
• Nuclear cameras
• Cath labs
• PACS
• Patient monitoring
• Laboratory equipment
• Ambulances
• EHR and EMR implementation

First American structures leases for healthcare organizations by offering customized terms that align with capital plans and the useful life of medical, IT, and facility equipment. This often includes multi-vendor bundled financing and flexible features like deferred, step, or progress payments. Typical term length for medical equipment ranges from 3 to 7 years. 

First American has earned HFMA’s Peer Review designation since 2011—recognition that helps healthcare leaders identify trusted financial providers based on value, effectiveness, and ease of use. More than 1,000 healthcare organizations have worked with First American on a wide range of priorities and needs.

Aircraft financing is offered by banks, bank-owned lenders, and specialized aviation finance companies. When evaluating providers, borrowers typically consider capital strength, aviation expertise, underwriting flexibility, financial stability, service standards, and available loan structures in addition to rates.

Most financing providers offer funding across a range of aircraft categories, including business jets, turboprops, and helicopters.

Yes, fractional aircraft shares can be financed, although not all financing providers offer this option. Fractional loans typically have shorter terms and lower loan-to-value ratios to align with the structure and duration of the operating agreement. First American offers financing for eligible U.S.-based fractional shares, subject to underwriting and program requirements.

Yes, aircraft used for charter operations can be financed, although commercial activity affects underwriting, structure, and credit terms. Financing providers, including First American, typically evaluate expected utilization, revenue profile, and maintenance exposure, and may differentiate between full-time charter aircraft and mixed personal and charter use when determining terms.

Aircraft financing providers generally work with high-net-worth individuals and organizations that can demonstrate strong liquidity, consistent cash flow, and overall financial strength. Underwriting standards for aircraft tend to be more comprehensive than traditional commercial lending due to large loan sizes and the cash flow burden associated with operating and maintaining an aircraft.

Key components of an aircraft loan typically include term length, amortization period, loan-to-value ratio, interest rate structure, down payment requirements, prepayment provisions, and any financial covenants.

Factors like creditworthiness, liquidity, and net worth profile, as well as the aircraft type, age, condition, and usage affect loan rates. Large, bank-owned lenders are often able to provide more competitive rates than small, independent lenders. 

Yes, many aircraft financing providers offer the option to choose a fixed- or floating-rate loan. Many large banks have interest rate risk management divisions that can help in offering interest rate swaps, caps, or collars to help hedge interest rate risk.

Aircraft loans for whole aircraft are typically 5 to 10 years, and amortization periods are typically 10 to 20 years. Fractional aircraft loans are typically 3 to 5 years with amortization periods up to 15 years. Term lengths are dependent on factors like the age of the aircraft and the profile of the borrower, with newer aircraft and highly creditworthy borrowers able to qualify for longer term lengths. The amortization period, the schedule used to calculate monthly payments, is often longer than the term of the loan, leaving a balloon payment at the end of the term. Amortization periods are determined by aircraft usage, the credit strength of the borrower, and the age, make, and model of the asset. Older assets, smaller cabins, and more heavily utilized aircraft depreciate faster and therefore have shorter amortization periods.

Generally, LTV ranges from about 70% for older, pre-owned aircraft to up to 85% for fractional shares and up to 90% for new whole aircraft. Sometimes used interchangeably with “advance rate,” LTV is the loan balance divided by the appraised fair market value of the asset.

Aircraft financing typically includes closing or origination fees, title and escrow fees, appraisal or valuation costs, and legal documentation fees, including both borrower and lender transaction counsel as well as FAA counsel filing the security agreement.

Yes, cash‑out financing—sometimes referred to as a reimbursement loan—can be used when an aircraft is purchased with cash and financing is arranged afterward. This approach is often chosen when there is not enough time to secure financing before the transaction, or when additional liquidity is desired after paying cash. Financing providers typically offer this option within a fixed period following the original purchase. To qualify, the transaction must have an approved title and proper escrow handling to ensure a clear FAA chain of title.

When an aircraft loan reaches maturity, most loans offer the option to refinance the remaining balance with the same financing provider or a new financing provider (subject to approval), pay off the balance, or sell or trade the aircraft and use the proceeds to fully or partially satisfy the outstanding loan. In many cases, the balloon is refinanced at maturity. Refinancing can help secure a new rate, modify the amortization schedule, or adjust the overall loan structure to better align with their current financial or operational needs.

When registering a financed aircraft, the FAA must receive documents proving ownership and any lender’s security interest. The FAA registration and lien recording process includes the following:

• FAA Bill of Sale
• FAA Registration Application
• Aircraft Security Agreement
• LLC Statement in Support of Registration or Affidavit of Citizenship

A lender will require financial statements, tax returns, and evidence of liquidity. Documentation requirements will vary based on the lender and whether the buyer is an individual or an organization. 

Generally, an individual can expect to provide:

• A personal financial statement showing net worth
• Recent tax returns and K-1 statements 
• Investment statements to qualify liquid assets

An organization can expect to provide:

• Recent CPA-prepared year-end financial statements
• Business tax returns
• Documentation of the organization’s ownership structure and debt structure
• Accounts receivable and accounts payable aging reports

A vendor financing program allows vendors to offer payment options through a lender, enabling customers to spread costs over time instead of paying upfront. The vendor introduces financing as part of the sales process, and approved transactions are funded by the lender.

Vendor financing programs are commonly used by OEMs, manufacturers, distributors, and solution providers that sell equipment, software, or bundled offerings. They can be especially valuable for higher-dollar, multi-phase, or subscription-based projects, as well as equipment that is refreshed frequently or becomes obsolete quickly.

Vendor financing programs can include equipment, software, implementation, deployment, installation, training, maintenance, and other project-related services. Bundling these costs into a single agreement can help simplify purchasing and reduce upfront barriers for customers.

For vendors, offering payment options can help increase close rates, protect margins, and support larger deal sizes. For customers, vendor financing can help reduce upfront costs, create predictable payments, and align expenses with project timelines and expected value.

Vendor financing helps reduce upfront cash constraints by spreading payments over time—helping customers move forward with broader solutions. This may support additional products, services, or phased rollouts that align with long-term objectives.

By giving customers a way to spread costs over time instead of reducing their price, vendors can make their solutions more accessible to customers while differentiating themselves in the market. 

Requirements typically include a vendor agreement, alignment on eligible products and services, and a defined process for submitting transactions. First American vendor financing programs also have specific qualification criteria, including minimum revenue thresholds and minimum average transaction sizes.

Vendors typically find that payment solutions are most effective when introduced to customers early as a standard option rather than a last-minute alternative. First American supports vendors with tools, training, and program structures designed to integrate smoothly into existing sales workflows.

Vendor financing programs can be offered under the vendor’s brand, co-branded with the financing provider, or branded directly by the financing provider. First American supports multiple branding approaches so vendors can choose the structure that best fits their go-to-market strategy and customer experience.

Vendor payment timing is based on the transaction structure and invoicing requirements. Funding approaches can be aligned to support vendor cash flow while meeting customer project timelines.

Vendors work with a dedicated Program Manager who serves as a single point of contact. The Program Manager supports the Vendor program setup, sales alignment, transaction execution, and ongoing program optimization.

First American combines dedicated program management, flexible branding options, and scalable transaction support. Vendors can integrate financing into their sales process while maintaining control of the customer relationship and delivering flexible payment options that support a wide range of transaction sizes and project types.