Transaction Sizes | Types of Structures | Lease Options | End of Term Options Available | Payment Plans
Types of Structures
Our company specializes in the most common types of leases. These include:
Operating Leases - A Lease that meets the four major qualifications of FASB 13. The qualifications include: 1) No Bargain Purchase Price; 2) No Automatic Transfer; 3) Present Value of Payments not to exceed 90% of the Equipment Cost and; 4) Term of the Lease not to exceed 75% of the Economic Life. It is the responsibility of the Lessee to review and obtain approval from their auditor in regards to a lease structure qualifying as a FASB-13 lease.
Tax Lease - A Tax Lease is specifically structured to show that the benefits and burdens of ownership all vest with the Lessor. Under a Tax Lease, the Lessor receives tax depreciation benefits, ultimately translating to a lower overall cost to the Lessee. In addition, the Lessee writes off the rent expense in the transaction, often times resulting in an acceleration of tax benefits and an overall tax bill reduction.
Capital Leases - A Capital Lease is one in which any one of the criteria for an operating lease is not satisfied. From a financial reporting perspective, this translates to a lease structure that has the characteristics of a purchase agreement. Such a lease is accounted for as an asset and as a related obligation on the balance sheet.
Equipment Finance Agreements - Otherwise known as an EFA, it is a security agreement where the secured party takes a priority interest in the equipment.