When a company develops a procurement strategy for the acquisition of equipment, it seeks a standard process for working with vendors to obtain equipment in a manner agreeable and familiar to both parties. One often overlooked procurement method is the lease with title transfer strategy – a capital lease procurement method that allows a company to lease equipment and obtain ownership upon the final lease payment.
The bones of this strategy do not differ much from other common procurement strategies, such as traditional leasing or financed purchasing. Lease with title transfer is also very similar to leasing with a $1 buy-out option, but excludes the legal obligation to send the lessor $1 to obtain title of the equipment. Despite its similarities to other strategies, a lease with title transfer approach offers multiple benefits that should not be overlooked.
This ISG white paper examines characteristics and benefits of the lease with title transfer strategy, and discusses various scenarios where this strategy can be applied.