Synthetic Lease

AFG’s synthetic leases allow the Lessee to not record the equipment as an asset on their balance sheet, but instead, it is accounted for as an expense. Synthetic leases are seen as a lease from an accounting perspective and as a loan from a tax perspective.

AFG’s synthetic leases:

  • Offer easy financing options with nominal monthly payments for the term of the lease
  • Helps the Lessee to explore the option of buying said equipment at the prevalent market rates (or a specified price), thus transferring the ownership to their name

Irrespective of the value of transactions or price of the equipment or holdings to be purchased, AFG arranges for synthetic leases for a relatively shorter lease term at attractive payment options. Rather than rent expense, a synthetic lease will be handled as financing for tax purposes, which allows interest expense and depreciation deductions to be experienced by the Lessee.


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