7670 Woodway Drive
Suite 200
Houston, TX 77063
     
   
 
This type of lease is similar to a loan as it allows the customer to consider the equipment as an asset on the customer’s balance sheet and claim the tax depreciation.

A lease is considered a Capital Lease if it meets any of the following criteria:

The ownership of the equipment is transferred to the lessee at the end of lease term.
The lessee has an option to purchase the equipment at the end of the term.
The term of the lease is equal to at least 75% of the economic life of the property, except when the equipment is leased at the end of its economic life.
The minimum lease payments should be equal to at least 90% of the market value of the equipment, minus tax credits
Examples of Capital leases are:
•   Customer has a $1.00 residual
•   Guaranty 5%, 10% or 20% residual, and
•   10% Purchase options.
 
 
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