Operating Lease
Usually referred to as “off-balance-sheet financing,” an operating lease can allow a company to acquire equipment without any negative impact to the debt side of the balance sheet. This form of lease also preserves key financial ratios, such as debt to equity, and debt service coverage.

Capital Lease
This type of lease is accounted for as an on-balance-sheet transaction but can be a tax or non-tax lease for tax reporting purposes, where the lessee either has a fixed buyout or return options at the end of the lease. On the financial statements such a lease is shown in the assets and corresponding liability sections of the balance sheet while the cost of the lease falls below the EBITDA line on the profit and loss statement.

Tax Lease
A tax lease is specifically structured to show that the benefits and burdens of ownership vest with the lessor. The lessor receives tax depreciation benefits, usually translating to a lower overall cost to the lessee. 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.

Non-Tax Lease
Usually referred to as a “$1 buyout”, this non-tax lease specifically provides the lessee with ownership of the equipment, and is usually structured as a purchase agreement.

Sale Leaseback
In a sale-leaseback transaction a company sells its capital equipment to CapEx Financial, and we immediately lease it back to the company. The company receives cash for its equipment as well as potential improvements in the balance sheet, profit and loss, and taxes. Companies interested in this strategy typically agree that cash tied up in highly depreciating equipment can be better utilized elsewhere.

Lease Line of Credit
Not all acquisitions are installed at the same time, which is why CapEx Financial offers a lease line of credit. This tailored funding strategy gives our clients the ability to acquire multiple types of equipment over a prolonged period of time. Lease documentation and administration is significantly reduced, and asset tracking becomes much simpler.