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Direct Finance Lease
This lease instrument is similar to most leases in that the lender/lessor retains title to the equipment financed until the contract is paid in full and a residual amount is paid, typically $1.00
With this finance agreement, the lessee must capitalize and depreciate the equipment. However, this type of financing will qualify most small businesses for a tax benefit by accelerating depreciation under Section 179 of the IRS code.
Credit criteria, documentation, and processing are similar to Equipment Finance Agreement (EFA) requirements.
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