Equipment Lease

Also called terminal lease, POS lease, non-cancellable lease, equipment finance agreement

A multi-year, usually non-cancellable agreement to rent a card terminal - frequently for several times what the hardware costs to buy.

What it is

An equipment lease is a separate financing contract, usually with a third-party leasing company rather than your processor, covering your card terminal or POS hardware. Terms of 36 to 48 months are standard, and the defining feature is that they are typically non-cancellable: the obligation survives your business closing, your processor changing, and the equipment breaking. The arithmetic is the problem. Terminal hardware in 2026 costs roughly $199-$500 for a countertop or handheld unit, and full POS systems run $499-$1,399 for Clover, $659-$1,789 for Lightspeed, $800-$2,000 for Toast. A 48-month lease at $59 a month is $2,832 for hardware that could have been purchased outright for a few hundred dollars. At $89 a month it's $4,272. Because the lease is a separate contract with a separate company, cancelling your merchant account does nothing to it. Merchants routinely switch processors and keep paying a lease on a terminal they no longer use, sometimes for years. Many leases also include automatic renewal, insurance charges, and a purchase option at fair market value that turns out not to be nominal. This practice has a long enforcement history. The FTC has pursued small-business equipment-lease operations, and industry consensus is blunt: non-cancellable 48-month POS leases remain the single most damaging practice in the channel.

Why it matters to your business

A 48-month lease at $69 a month is $3,312 for a terminal worth $300. That is $3,000 of pure loss, and it is the single largest avoidable expense most small merchants encounter in payments - larger than years of rate differences. And it removes your leverage entirely. Once you're leasing, changing processors doesn't stop the payment, so the processor knows you can't credibly threaten to leave. The lease isn't just expensive; it's the mechanism that makes everything else expensive.

Where it gets contested

There is no serious defense of the 48-month non-cancellable terminal lease, and the industry knows it. Leasing survives because it pays extremely well: the agent earns a large upfront commission from the leasing company, often several hundred dollars, on top of processing residuals. The merchant funds it at four to ten times the hardware's value. The standard justification - that leasing preserves the merchant's capital and includes support and replacement - falls apart on inspection. Preserving capital on a $400 purchase is not a real financial need for a business that just signed a multi-year processing agreement, and replacement coverage is usually a separate charge inside the lease anyway. What is genuinely worth knowing: the lease is enforceable. These are commercial contracts between businesses, so the consumer protections a merchant might expect largely don't apply, and leasing companies pursue collection aggressively. Merchants who stop paying find themselves in collections and occasionally in court, and personal guarantees are common. The practical rule is simple and absolute. Buy your hardware, or take month-to-month rental you can cancel. If a deal only works because a lease is attached, the deal doesn't work.

How to check it yourself

Determine whether your terminal is leased, rented or owned - the lease will be a separate agreement, often with a company name you don't recognize, and it may bill separately from your processing statement. Then compute total remaining payments and compare to the hardware's purchase price. If you're being offered a lease right now, ask for the total of payments and the buyout, in writing, before signing anything.

Receipts

Claims above that are checkable, with where to check them. Published so you do not have to take anyone's word for it.

Non-cancellable 48-month POS leases remain the single most damaging practice in the channel
ftc.gov ↗
The FTC has pursued small-business equipment-lease operations
ftc.gov ↗
POS hardware costs $499-$1,399 for Clover, $659-$1,789 for Lightspeed, $800-$2,000 for Toast
orderpin.co ↗
Free terminals are recovered through non-cancellable multi-year leases, elevated rates, or clawbacks if the merchant closes inside 12-18 months
cardconnect.com ↗