Technology Financing Lease Rates Explained Blog Feature

By: GreatAmerica on July 8th, 2023

Technology Financing Lease Rates Explained

Updated 6/21/2023. Originally published 5/6/2021.   

Leasing and financing are a newer concept in the technology space, creating a little bit of mystery around the topic. This blog serves as a thorough guide to both understanding and calculating a monthly payment option. First, we want to briefly highlight the benefits of offering a flexible way for your clients to acquire your technology.  

Related: The Financing Process in 7 Steps: How to Offer Financing to My Customers 

The Benefits of Offering a Monthly Payment Option 

It’s no secret that consumption behavior has shifted, and continues to shift, toward monthly payment options. Leasing and technology financing allow for the use of today’s technology on tomorrow’s dollar. Among the many benefits for both you, the solution provider, and the end user are: 

  • Allowing your customers to conserve cash 
  • Providing your client an immediate Return on Investment (ROI) 
  • Experiencing fewer Days Sales Outstanding (DSO) 
  • Creating a sticker customer base 

Related: 8 Reasons to Offer a Monthly Payment Option  

How is Leasing and Technology Financing Priced? 

Lease and finance agreements at GreatAmerica are based on lease rates. A lease rate factor is represented as a fraction or multiplier and is used to calculate a monthly payment. 

Unlike an interest rate, a lease rate does not change throughout the term, nor does it amortize (meaning there isn’t a separate principal and interest listed that is paid down at different rates.) Instead, the finance charges are fixed over the term, and there is no economic upside to paying off a lease early. 

When you or your customer multiply the lease payment by the term, the difference between that and the cash price is the finance charge. 

Related: What’s the Difference Between a Lease and a Bank Loan? 

How to Calculate a Monthly Payment 

We use a table of lease factors, sometimes referred to as a lease rate. If you know the equipment price, you multiply it by the rate factor to get your monthly payment: 

Equipment Cost x Lease Rate = Monthly Payment 

You can also go about the calculation backwards if you know what the monthly payment should be. That calculation is: 

Monthly Payment / Lease Rate = Equipment Cost. 

If that sounds like too much work, have no fear – we have built calculators to help make the process quick and painless. SnappShot is our mobile app that calculates monthly payments and allows your sales team to submit applications on the road. The GreatAmerica portal,, also has a pricing calculator that allows you to create a proposal. 

Best yet, the monthly payment calculator integrates with the tools you already use. We’ve partnered with companies like ConnectWise CPQ, Salesforce, QuoteWerks, Tigerpaw, ChannelOnline, Solutions360 and D-Tools to enable you to quote payments with a few simple clicks. 

Frequently Asked Financing Questions 

As the finance provider, part of our responsibility is to use our eyes and ears to seek out better ways to help you offer the monthly payment option. We’ve gathered a small compilation of questions received around the topic of lease rates and pricing. 

What does “lease rate” mean? 

A “lease rate” is used by finance companies to determine how much they will fund a dealer/vendor for a lease transaction. The “lease rate” is a fraction presented as a decimal, the numerator of which is the amount of the monthly payment and the denominator of which is the amount the finance company pays the dealer/vendor for the equipment. 

For example, if a lease contract calls for 60 monthly payments of $217 each and the lease rate is .02170, then the finance company would pay the vendor $10,000 for the lease ($217 ÷ .02170 = $10,000). 

Do your rates change based on my client’s credit? 

No. The result of our customer credit check does not influence the lease rate, rather it only determines whether or not we will underwrite the transaction. Applying a rate based on a customer's credit is called risk-based pricing, which is a practice banks use when providing loans. 

What fees should my customer expect on a lease or finance agreement? 

The fees charged throughout the agreement depend on the finance company. Some companies will charge a lower lease rate but make up for it over the term of the agreement in fees, while other companies charge a higher rate and don’t nickel-and-dime your customers throughout the lease term. 

Generally speaking, your customers who finance with GreatAmerica can expect a one-time origination fee. Additional fees that might be assessed include late fees for past due payments, and insurance fees if proof of insurance is not provided.  

Related: What Fees Should Your Customer Expect on Their Technology Lease or Rental  

Finding a Trusted Leasing Partner 

Leasing and financing can seem complex, but if you select a trusted leasing company, the process can be quite smooth. Need help evaluating a leasing company? Start by asking these seven questions of your provider to better understand how they will treat you and your customers. 


GreatAmerica is the largest independent, family-owned national commercial equipment finance company in the U.S. and is dedicated to helping manufacturers, vendors, and dealers be more successful and keep their customers for a lifetime. GreatAmerica was established in Cedar Rapids, Iowa in 1992 and now has offices in Iowa, Georgia, Minnesota, and Illinois. In addition to financing, GreatAmerica offers innovative non-financial services to help our customers grow.