SYNTHETIC LEASES
Combine the advantages of leasing with ownership options.
In its simplest form, a synthetic lease is a type of off-balance-sheet financing that provides a number of benefits for Regents’ corporate clients, including enhanced financial ratio performance; as much as 100% financing with competitive pricing; and tax benefits, including deductions for both lease payments (as operating expenses) and interest expense and depreciation (similar to a capital lease) if exercising the fixed price purchase option (FPO).
At the end of the term, the Client may exercise the FPO to purchase the equipment at a predetermined fixed purchase price. Given the complexity of structuring Regents’ Synthetic Leases to qualify as an operating lease for financial accounting purposes and to qualify as a financing transaction under existing federal tax law, we advise that all our clients consult with their tax and legal advisers to examine all advantages based on the specific lease terms and the client financial accounting and tax requirements.
Features & Benefits
Commercial equipment financing through Synthetic Leases
Tax Benefits:
Off-Balance Sheet
With off-balance sheet financing, qualifying payments on a Regents True Tax Lease are up to 100% deductible as an operating expense as opposed to only being able to deduct depreciation and interest.
100% Financing
Options
At Regents, we understand that financing may be needed for associated project costs including soft costs such as installation, design fees, software, delivery, training, etc. – costs that many banks cannot or will not cover.
Tax Benefits:
Section 179
Under Section 179, the entire cost of the qualifying equipment may be written off the year it is purchased and put into use. The client may opt to own the equipment after the lease is up (at a low pre-negotiated price).
Progress
Payments
Our clients save time and upfront cash when Regents manages all of the invoicing and necessary progress payments. This increases efficiency and progress as well as and helping to alleviate many vendor-induced headaches.
Avoid Bank
Restrictions
Avoid blanket liens, restrictive covenants, rate escalator clauses, compensating balance requirements, or other typical surprises in traditional lending restrictions, all while improving financial and internal performance ratios.
Lower Financing
Costs
Lower costs with no hidden charges, non-utilization fines or fees in fine print. Converting variable debt to fixed rate financing hedges against inflation and rising interest rates as payments remain the same for the term of the contract.
3 step process
Regents Capital streamlines the process to get your commercial equipment financing faster
Review
We review credit application and other related materials, past transactions and current business goals.
Approval
We structure the transaction and with approval by both parties, final documentation commences.
Funding
Regents funds the equipment and manages finance project scheduling, vendors and documentation as needed.
FREQUENTLY ASKED QUESTIONS
What Types of Equipment do you finance?
We finance almost any type of commercial equipment, including for example:
- Transportation – Titled vehicles, truck/trailer, aircraft, GSE, rail, marine.
- Retail, Food and Beverage – Food processing lines, industrial kitchen appliances,
packaging, store build-outs, POS systems, etc. - Manufacturing and Processing Equipment – CNC, printing presses, metal
forming and stamping, extrusion, injection mold machines, waste processing,
robotic, automated distribution systems, material handling, etc. - Heavy-Industrial Equipment – Yellow iron, cranes, energy production and
services equipment, construction equipment, forklifts, etc. - Technology Equipment – Computers, servers, telecom, data centers, enterprise
software, medical equipment, test and monitoring equipment, etc.
This is by no means a comprehensive list. Give us a call at (888) 901-4207 to talk to us about your specific business equipment needs and growth goals.
What About new, used or highly customized equipment?
Regents funds 100% of new equipment cost (+ most soft costs) and typically funds used and/or highly customized equipment up to 100% of FMV. We also offer up to 100% reimbursement for existing equipment purchases made within the last 12 months.
What terms do you offer?
Regents offers flexible terms from 24 to 72 months depending on the unique business needs of each client. Seasonal (Step or Skip), Monthly and Quarterly payment schedules are available, as are longer terms depending on the type of structure and the client’s credit profile. In addition, depending on the type of lease, Regents offers custom buyout structures including $1 Buyouts and Fair Market Value (FMV) options and terms.
Can “Soft Costs” be included in our lease?
Regents is typically able to finance all or most of the soft costs included in equipment transactions. Such soft costs include, but are not limited to, installation (services, foundation, electrical, piping, etc.), freight, software, training, engineering & design, etc.
What Documentation do i need to provide?
In most cases, Regents only requires a completed application, current interim statement and the last 3 audited or reviewed financial statements. If available, an equipment quote will help to speed along the review process.
On occasion, if audited or reviewed financial statements are not available, we have been able to secure funding with corporate bank statements or tax returns. Approvals are granted only on a case-by-case basis.
Who will service our account and be our point of contact?
Effective management of all transaction processes, schedules and documentation are provided by dedicated project teams that consist of an Account Executive, Account Manager, Documentation Manager, and Vice President of Credit as well as various specialists and administrative staff.