TAX LEASES

NON-TAX LEASES

FINANCING ARRANGEMENTS

  • Also referred to as True Leases

  • Lessor¬†retains ownership

  • Lessee gets lower payments

  • Also referred to as a Finance Lease

  • Lessee is treated as the owner

  • Lessee is entitled to tax benefits

  • Customer is treated as the owner

  • Customer is entitled to tax benefits

Fair Market Value (FMV) Lease

End of Term Options

  • Purchase the equipment at FMV

  • Renew the lease

  • Return the equipment

Lease Purchase / Finance Lease

Arrangement for the purchase of the asset

  • $1.00 Buyout at end of term

  • Stated Purchase Option (10%, $101, etc.)

Equipment Finance Arrangement (EFA)

Provides a finance product while accruing equity

First Amendment Lease

End of Term Options

  • Purchase the equipment at the FMV or set floor amount (residual value)

  • Renew the lease

Loan

Customer pays a fixed amount over a period of time

Terminal Rental Adjustment Clause (TRAC) Lease

For motorized vehicles and trailers

End of Term Options

  • Purchase the equipment at the TRAC amount (stated price) at end of term

  • Return the equipment guaranteeing the residual amount

Installment Payment Agreement (IPA)

  • Customer pays a fixed amount over a period of time

  • Used to finance non-tangible collateral