An alternative to a loan, but what is lease to own?

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Let’s face it, unless you’ve leased equipment, you probably don’t have much experience with leasing.  But for businesses that sell durable goods and serve a broad range of customers, lease to own is becoming an important payment solution. But what exactly is lease to own and how is it different from a traditional loan?  

Generally speaking, both allow customers to acquire products now and pay them off over time. Path to ownership, data interpretation and target audience is where they differ.

The difference between a POS loan and lease to own?

A POS loan is a tool where money is lent to a customer from a lender. The customer pays back the lender in locked monthly payments plus interest.

Lease to own is an alternative where product(s) are lent to a consumer (from a leasing company). The customer pays back the leasing company in flexible payments over a set duration. At the end of the lease term, the customer either obtains ownership of the product or can return it.

Either way, the retailer receives payment in full at checkout and the customer takes possession of the product; the transaction was simply facilitated in two different ways.


POS loans and lease to own are clearly different in terms of repayment agreement and path to ownership. But transparency on how either agreement was established in the first place remains unclear.  It’s important to note that each financing tool interprets customer data and its subsequent risk through varying lenses. Loans evaluate your past and present to predict your future behavior,

lease to own simply cares more about your ability to pay now, rather than your recorded payment history.

Additionally, loans and leases differ in target audience. Loans cater to higher credit customers who have many options, while leases focus on people who need payment flexibility.


However, both tools ultimately serve the same purpose:

Granting access to desired products for a budget conscious customers on behalf of retailers. So in actuality, their differences are complementary.

If you want to extend your payment reach into an untapped audience not being served by the types of loans offered through the credit card issuers and/or fintech companies, then offering a POS Leasing solution is for you. Lease to own financing, like Zibby, elevates your business by ensuring there is a suitable payment option available for all customers, regardless of their credit standing.