A bank loan, cash, or a capital($1 buyout)lease will normally recapture some of your cash expense by claiming depreciation on the equipment, according to the IRS accepted "useful life" of that equipment. You may also claim the interest portion as an expense during the term of any repayment. Depreciation, however, must be spread over 5-7 years on long-lived equipment. The same equipment in an Operating Lease, or Fair Market Value Lease can effectively be 100% expensed during whatever lease term is selected. For example: you enter into a 36 month (FMV) lease on equipment that would be normally depreciated over say, 5 years and you will effectively have written off all of its value (less residual) in just 3 years, instead of 5! Of course, we always recommend that you consult with a tax professional.