Equipment Leasing and Finance 101 - Baker Donelson

[Pages:64]Equipment Leasing and Finance 101

Alfrado Donelson, Baker Donelson adonelson@ Ken Weinberg, Baker Donelson kweinberg@

The Equipment Leasing and Finance Industry

? Equipment leasing and finance is one of the most popular means of financing the acquisition of business equipment in the United States.

? In 2014, American businesses, nonprofits and government agencies invested more than $1.4 trillion in capital goods and software (excluding real estate). Approximately 65% (or 900 billion) was financed through loans, leases and other financial instruments.



? 2016 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

2

The Equipment Leasing and Finance Industry

? Equipment leasing and finance is one of the most popular means of financing the acquisition of business equipment in the United States.

? In 2014, American businesses, nonprofits and government agencies invested more than $1.4 trillion in capital goods and software (excluding real estate). Approximately 65% (or 900 billion) was financed through loans, leases and other financial instruments. More than $1 trillion projected for each of 2015, 2016 and 2017.



? 2016 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

3

The Equipment Leasing and Finance Industry

? Equipment leasing and finance is one of the most popular means of financing the acquisition of business equipment in the United States.

? In 2014, American businesses, nonprofits and government agencies invested more than $1.4 trillion in capital goods and software (excluding real estate). Approximately 65% (or 900 billion) was financed through loans, leases and other financial instruments. More than $1 trillion projected for each of 2015, 2016 and 2017.

? A historical/industry perspective is important and it is not enough to only understand the various discrete legal, documentation and other concepts applicable to equipment leasing and finance...



? 2016 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

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Specialized Area With Deep, Historic Roots



? 2016 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

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Not Traditional Bank Financing

? Even the most experienced equipment leasing and finance professional should remind themselves from time to time about the unique nature of this industry.

? The industry approaches issues and documentation differently because of its history and origins, viewing transactions through its own special lens...



? 2016 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

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Not Traditional Bank Financing



? 2016 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

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The 1800s

? The first significant recorded equipment leasing transactions related to transportation needs in the 1870s with the leasing of barges, railroad cars and locomotives using equipment trust certificates.

? Trusts continue to be used in more structured transactions like leveraged leases and in titling trusts (facilitating motor vehicle syndications).



? 2016 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

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