GPU lease vs. loan
A loan costs least to own. An FMV lease needs the least cash, and you can hand the servers back.
The same $20M cluster, four ways
256 GPUs on a 36-month take-or-pay at $3.70 per GPU-hour. The loans need half the cost in cash. The leases need about a fifth, and cost more to own.
| 24-month loan | 36-month loan | 24-month FMV lease | 36-month FMV lease | |
|---|---|---|---|---|
| Down payment | 50% | 50% | 20% | 20% |
| Rate | 14% | 15% | 17% | 18% |
| Cash at closing | $10M | $10M | $4.43M | $4.42M |
| Monthly payment | $480K | $347K | $432K | $424K |
| Coverage (DSCR) | 1.19x | 1.64x | 1.32x | 1.34x |
| FMV buyout at the end | None | None | $10M (50%) | $7M (35%) |
| Cost if you return it | n/a | n/a | $14.37M | $19.26M |
| Cost to own | $21.52M | $22.48M | $24.37M | $26.26M |
The default case in the loan vs lease workbook below: $122K a month of operating cost, lease payments one month in advance.
Editable spreadsheet comparing a loan against an FMV lease: payments, total cost to own, and coverage.
Coverage decides more than cost
The cheapest to own is not always the one a lender will write. The 24-month loan costs least to own at $21.52M, but its $480K payment leaves 1.19x coverage, under the 1.25x many lenders ask for. The 36-month loan clears it at 1.64x. The leases sit at 1.32x and 1.34x, with $4.42M at closing instead of $10M.
At the end of an FMV lease
- Return
- Hand the servers back. You owe nothing more.
- Extend
- Usually 12 months, at roughly 30-40% of the original monthly payment, subject to your financials then.
- Buy
- At fair market value, from the wholesale market. The lessor usually sets it; sometimes a third party appraises it. A buyout cap is negotiable but high, around 50%.
- Refinance
- Take a loan equal to the FMV, buy the servers, and repay it over about 12 months.
Valuing the servers at lease end: GPU appraisals.
Which one fits
- Cash on hand
- Enough for 30-50% down? Take the loan. If you can’t reach 50%, an FMV lease may be the only option.
- The servers at term end
- On a 5-year contract you may not want 5-year-old GPUs. Plan to return them: lease.
- Monthly payment too tight
- Lease, or a loan with a balloon at maturity.
Run your own loan and lease. FMV, $1 buyout and sale-leaseback structures: GPU leasing.
Two minutes to find out if you qualify.
- Your financing application link, straight away
- A 20-minute onboarding call
- A straight answer if it’s not a fit for the program
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