Equipment Lease Financing Agreement

Lessee having its principal place of business located at 16313 north dale mabry suite 100 tampa fl 33618.

Equipment lease financing agreement.

Ge capital colonial pacific leasing lessor with a place of business located at 13010 sw 68 th parkway portland oregon 97223 and shells seafood restaurants inc. An efa is similar to a loan and efa s use terms like lender and borrower. An equipment lease agreement is an agreement where the owner of the equipment permits the user to use the equipment in exchange for a periodic lease payment the owner of the equipment is the lessor the user is the lessee. The lessee customer then has the option to return the equipment for new or buy it for 1.

Names include equipment finance agreement or efa capital lease finance lease 1 00 buyout. An equipment finance agreement is an alternative to traditional lease operating agreements. If lessee fails to perform or fulfill any obligation under this agreement lessee shall be in default of this agreement. Lease agreement made this day of between colonial pacific leasing corporation dba.

The equipment must be shown as an asset and depreciated which means the payments aren t fully tax deductable. An equipment lease agreement is a type of contractual document in this agreement the owner of the equipment or the lessor allows a person or company or the lessee to utilize the equipment for a specific amount of time in exchange for monetary compensation. Such arrangements generally are more flexible than leases. Annual payments are 28 500 to be made at the beginning of each year.

If you put an equipment finance agreement and lease agreement side by side you will notice the terms and conditions are virtually identical. Some industries or companies prefer this type of lease product because it may have some accounting benefits. On january 1 2017 xyz company signed an 8 year lease agreement for equipment. The equipment which can be leased includes any physical property such as vehicles machinery and other tangible properties except buildings.

At the end of the lease the equipment will revert to the lessor. Leveraged leases allow the lessee to finance the lease cost by issuing debt and equity against the equipment lease payments. Equipment lease agreement 2 lessee s premises and ii at the end of the lease term of shipping the equipment back to lessor s premises. Let s walk through a lease accounting example.

The equipment has a useful life of 8 years and has no residual value. At the end of the equipment finance agreement you have no further obligation to the financier. After making the last payment you own the equipment for 1. For example the lessor may opt for a hybrid equipment lease for tax and financial advantages.

An equipment lease agreement comprises certain terms that form the basis of the. Unlike an efa equipment finance agreement a 1 purchase option lease is when the lender owns the equipment until the end of the term.