$1 Buyout Lease

Certainty about end-of-term ownership has real value in imaging center planning. A dollar buyout lease delivers it directly. Monthly payments follow a lease schedule, and when the final payment clears you exercise your purchase option for one dollar. There is no residual to negotiate, no fair market value appraisal at term end, and no decision to make about whether to buy or return. You made that decision at signing, and the conclusion is fixed. For practices that want the tax treatment of a lease during the term and the simplicity of ownership at the end, this structure handles both.

How a Dollar Buyout Lease Works

A dollar buyout lease is a type of capital lease where the end-of-term purchase price is explicitly set at one dollar. Because there is effectively no residual value retained by the lessor, the monthly payments reflect the full amortization of the equipment cost plus interest, which means payments are similar to those on a CT scanner loan or an Equipment Finance Agreement over the same term.

The advantage over a standard loan, from some buyers' perspectives, is the lease documentation structure. Certain lender programs, particularly those targeting medical equipment, only offer lease documentation rather than promissory notes. For a practice that has an existing relationship with a lessor who uses this format, the dollar buyout lease keeps the documentation familiar without changing the economic outcome.

From a tax standpoint, a dollar buyout lease is treated as a purchase. You claim depreciation from the date the equipment is placed in service. Under Section 179 rules, the acquisition may qualify for a first-year deduction on qualifying property. The dollar buyout amount at term end is nominal and does not trigger a new purchase event for tax purposes.

Buyers Who Prefer the Dollar Buyout Structure

Practices that have a clear ownership intention from the outset are the natural fit for a dollar buyout lease. An imaging center that is building a permanent facility, investing in shielding and infrastructure specific to its CT equipment, and planning to use the scanner for seven to ten years is not well-served by an operating lease that ends with a return option. The dollar buyout lease eliminates the end-of-term ambiguity while preserving payment flexibility during the term.

Orthopedic clinics and pain management practices that install specialized imaging infrastructure around a specific scanner model also benefit from the certainty of the dollar buyout. These facilities make site-specific investments that are not recoverable if the equipment is returned at lease end. Locking in ownership at signing protects those investments.

Buyers who are financing a cone-beam CT system for a specialized clinical application, or a large-bore scanner for a radiation oncology program, typically want long-term ownership because the equipment is deeply integrated into the practice workflow. A dollar buyout lease provides that commitment while fitting within a lease documentation framework their lender or accountant prefers.

Dollar Buyout Payment Structure and Terms

Because no residual is excluded from the payment, dollar buyout lease payments track closely with loan payments on the same equipment at the same rate and term. For a CT scanner costing $500,000 financed over 60 months, the monthly payment differential between a dollar buyout lease and a straight loan is usually less than a few hundred dollars. The practical difference is in how the transaction is documented and whether the lender's program categorizes it as a lease or a loan.

Terms available on dollar buyout leases for CT equipment generally run 36 to 72 months. Longer terms lower the monthly payment and are common on higher-cost systems. For practices comparing a 60-month dollar buyout lease against a 60-month loan on a 128-slice system or a dual-source unit, the numbers are typically within a few percent of each other on a total cost basis.

Applications up to approximately $400,000 can often proceed on an application-only basis. Larger transactions typically require tax returns and financials. B and C credit situations are reviewed on a case-by-case basis.

Comparing Dollar Buyout to Adjacent Structures

The dollar buyout lease sits in the middle of the ownership spectrum. To its left is the operating lease, where you return the equipment at term end. To its right is the outright purchase via a loan or EFA, where you own the equipment from day one with no lease documentation at all. The dollar buyout delivers the ownership outcome of a purchase with the payment structure and documentation format of a lease.

For practices interested in financing a refurbished CT scanner with a clear ownership intention, the dollar buyout lease is often more available than a standard loan from certain specialty lenders whose product set centers on lease structures. Comparing which lenders offer each structure for your specific equipment type is part of what we evaluate when structuring your application.