Financing Solutions
We understand that every company has its own unique financing requirements. With this in mind, Jules and Associates ensures flexible lease structures that can handle various funding amounts, term lengths, end of term buyouts and billing schedules. Our ultimate goal is to accommodate all of our client demands accordingly.
Our company specializes in the most common types of leases. These include:
| Operating Lease | 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. | |||
| Capital Lease | 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. | |||
| Vendor Residual | A Lease that blends the benefits of a tax lease and the benefits of a capital lease. The Vendor Residual offers lower monthly payments similar to a tax lease, while avoiding the negotiation at the end of a tax lease. The end of term provides the option to purchase the equipment at a set residual, or a third party vendor can pay it off. | |||
| 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. | |||
| Equipment Finance Agreement | Otherwise known as an EFA, it is a security agreement where the secured party takes a priority interest in the equipment. |
| Vendor Residual | Our unique Vendor Residual agreement is a lease structure that blends the benefits of both a Tax and Capital Lease transaction. The Vendor Residual offers a lower monthly payment similar to a Tax Lease, while avoiding the hassles of an end-of-term buyout negotiation. Instead, this Vendor Residual conveniently provides the option to have either the Lessee purchase the equipment at a set residual price or to have a third party vendor pay that same residual off. | |||
| Single Transaction | Also known as a “one off” transaction. We provide financing through one simple schedule. | |||
| Lease Lines of Credit | No obligation/no commitment fee Line of Credit. The Lessee receives an approval for a certain dollar amount that they may use through multiple schedules over a certain time period (subject to credit approval). Lessee may fund as much or as little of that Line of Credit amount based on their equipment needs, with no fees applied towards any unused balance.” | |||
| Sale Leaseback | Allows a company to finance equipment that has been recently purchased. By providing proof of payment, the Lessee may be reimbursed for any out-of-pocket capital expenses that they can then term out on a lease structure. A Sale Lease Back Increases working capital, helps maintain cash flow and allows for a company to reinvest back into the company. | |||
| Debt Refinance | Restructuring existing debt under new terms and conditions that can reduce the monthly payment and extend the term length of the Lessee’s original finance agreement, thus helping with the company’s cash flow. These refinancing structures can be applied towards larger balloon payments and Fair Market Value buyouts as well. | |||
| Vendor Financing | We provide full service financing for vendors and their customers including private labels, pricing sheets, pooling and other vendor related products. |
We provide end of term structures to meet your specific needs. In each case, we address the customer’s cash flow, operating lease qualification and options to acquire or return the equipment. Each end of term provides its own specific advantage.
| Residual Lease | At the end of the lease, the Lessee may purchase the equipment for a set residual, or a vendor can pay off the residual. This is a great tool to use when upgrading equipment every 3-4 years. The vendor will pay off the residual in order to earn your new business. The lessee avoids all of the costs associated with returning equipment. | |||
| $1.00 | Transfer equipment at the end of the term to the Lessee for $1.00 | |||
| Capped or Closed-Ended | End of Term purchase options from 1%-40% of the original equipment cost. This type of structure works for both capital and operating leases. The higher residual held at the end of term allows for lower payments, thus helping with cash flow. Some capped or closed-ended purchase options come with return options that in turn provide flexibility to the Lessee at the end of term. This type of end of term structure also helps a lease address FASB 13 criteria. | |||
| Balloon Payment | Some customers need a specific payment to align their cash flow with their intent to keep the equipment. The balloon payment is the perfect solution in that it includes a low monthly payment with an option to only purchase the equipment for a set amount at the end of term. | |||
| Open Ended | Offers the ability to continue the lease agreement on a month to month basis after the completion of the initial lease term. The Lessee may have projects that extend past the expected due date or may not have the replacement equipment ready at that time. For whatever the reason may be, this type of lease allows the Lessee to continue until the equipment is no longer needed. | |||
| Fair Market Value | The value of the equipment based on the sale determined at an arm’s length, between a willing buyer and a willing seller. We also offer Fair Market Value options that are capped or not to be less than a specific percentage. Our Fair Market Value options may be determined by the Lessee, the Lessor or by a third party appraiser depending on the structure approved by both parties. In short, we can offer a variety of Fair Market Value options to meet your qualification needs. |
Many of our customers have specific cash flow needs due to the seasonality of their industry or the equipment purchased. Some capital purchases may take time to provide results, while other capital purchases will only support a specific project. We understand this and can provide different payment plans.
| Skipped/Seasonal | We provide payments to address seasonality. This works well with all seasonal businesses that receive payments for the goods or services during specific times of the year. We even have some customers who prefer just one annual payment. | |||
| Step up | For purchases where the cash flow will not be realized immediately. The payments gradually increase from the start to the end of the respective lease term. This is popular when expanding new locations or adding a second piece of equipment to support an already existing piece of collateral. | |||
| Step down | For purchases where the equipment will provide immediate cash flow for a specific period of time. This is popular with equipment that is needed to support contracts or specific projects. The contracts or projects have set time limits, yet the cash flow from the equipment after the projects have been completed is unknown. To solve this situation, the customer’s payments gradually decrease from the beginning to the end of the lease term. |
Transaction Sizes
Our customers needs are always changing, and our accommodating team is set up to meet their needs.