DECEMBER - JANUARY 8By Mark Stanley, Executive Director of Commercial Equipment Finance Originations, Commerce BankMark StanleyCOMMERCIAL BANKING - EQUIPMENT FINANCE SALESThe Equipment Finance industry is made up of bank-owned equipment finance companies (Bank of America Global Leasing, Key Equipment Finance, and Wells Fargo Equipment Finance are examples), captive equipment finance companies (IBM Global Finance, CAT Financial, and Ford Credit are examples), and various independent equipment finance & leasing companies. My background is in sales, working for bank-owned equipment finance companies and serving commercial, institutional, and local government borrowers, and providing equipment finance structures that help clients acquire equipment and other capital expenditures.Equipment Finance Products & StructuresThe products we offer are Equipment Loans, Capital Leases, Fair Market Value Leases, TRAC and Split TRAC Leases, and First Amendment Leases. Equipment loans and Capital Leases are similar in the sense that the Lender/Lessor puts up the financing as debt and takes a lien in the equipment, and the Borrower/Lessee owns the equipment and receives tax benefits on interest cost and depreciation. FMV, TRAC, Split-TRAC and First Amendment leases are considered tax leases where the Lessor takes ownership of the asset and leases the asset to the Lessee who makes the monthly payments. In this case, the Lessor receives the tax benefits of depreciation due to ownership. Tax leases also include residual values that are determined by the Lessor and end-of-term options that allow the Lessee to renew the lease, purchase the equipment, or return the equipment.MY OPINIONIN
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