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11-15-2018, 11:59 PM #1
- Join Date
- Dec 2017
- Posts
- 277
Equipment Financing
This is my first equipment financing deal.
Received a proposition letter for:
Transaction cost: $97,000.
Lease Structure: Lease.
Term: 60 months.
Monthly Payment: $1,962.17.
My account manager states that this is such a good deal (we matched a previous offer) that neither of us will make money. I don't see how I facilitate $97,000 and I don't make money on the deal.
The finance company wants a good faith deposit of $1,962.17 (1st month's payment) to move forward. Is this the norm?
Your input is greatly appreciated.
Thank you in advance,
Mike
msla*****er@sla*****er.com
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11-16-2018, 12:07 AM #2
- Join Date
- Dec 2017
- Posts
- 277
I forgot to mention this is an application only offer.
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11-16-2018, 10:32 AM #3
- Join Date
- May 2018
- Posts
- 53
Looks like a pretty solid deal for this industry. Based on that info, your out-the-door factor is between 7.5 - 8%. Considering buy rates on leases can be much more expensive than that, this seems like a strong offer. I'm guessing the commission is only a point or two. Many leases require between 0 and 2 payments upfront, so this is somewhat standard.
It's worth taking a look at the contract and seeing if this is a true lease or a capital lease. Also, keep an eye out for tricky clauses (evergreen, interim rent, etc) and what the purchase option, if any, is.Last edited by Onepointwhat; 11-16-2018 at 10:37 AM.
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