Sample  Financings (Commercial)

Catalyst uses creative lease financing to provide our customers with a competitive edge. Some examples are: A large amusement park wished to install $150,000 of energy efficiency equipment. Unfortunately, this project was not included in the current year's budget and they thought they would have to postpone the installation. A Finance Lease with a $1.00 purchase option was proposed with monthly payments less than the energy savings. The park was also concerned about having to make large payments when they are closed during the winter months. To accommodate the seasonality of their business, high-low payments were structured to allow large payments to be made during the summer months, and very small payments during the winter. An owner of eight (8) nationally branded fast food franchises wanted to install energy efficiency lighting and cooking equipment in all of their restaurants. Each installation came to about $25,000. The owner wanted the projected savings to pay for the financing costs and wished to expense the payments for tax purposes. A True Lease was structured with a Fair Market Value purchase option, allowing the owner to expense all lease payments. A Master Lease agreement (similar to a line of credit) was used, creating one $200k deal with eight pieces rather than eight $25k deals from the lessor's perspective. The Master Lease effectively lowered the underlying interest rate by over 2.5%. A Fortune 1000 company wished to install $750k of energy efficiency lighting, HVAC and gas production equipment in one facility. The company had a freeze on additional capital spending for the year. Off balance sheet financing would provide the solution, however the equipment was "too soft" to be acceptable for an traditional operating lease. A "Synthetic Operating Lease" effectively provided them with a lease that passed the FASB 13 financial tests and allowing it to be treated as an Operating Lease1. This "Synthetic Operating Lease" provided the customer with carefully worded equipment return and cancellation provisions. 1 Check with your accountant or tax advisor regarding accounting and tax treatment for all leases.