Original Workshop Overview
The Original Principles of Leasing Workshop has been designed to teach the fundamentals of personal property commercial equipment leasing for entry-level personnel and/or individuals with business experience who do not have a complete overview of the leasing business. Subjects address the "why" as much as the "how" to provide participants with a good foundation to grasp how the leasing business works, and where individual responsibilities fit into the workflow.
The Original Principles of Leasing Agenda
Please note: Each section will be presented as it applies to each of three markets: small ticket, middle market and vendor programs
Example of a Typical Lease
A simple story of an equipment lease is presented to set the stage between a standard loan arrangement and an equipment lease.
Common Terms Used in Leasing
The language of leasing is discussed to familiarize attendees with how different words and phrases are used. Throughout the workshop, additional terms will be explained within the context of their use.
- The Life Cycle of a Lease
A review of the paper flow of a lease from the marketing, sales, structuring & pricing phase into credit evaluation, documentation procedures, booking, billing, collection, termination and asset management phases. Prevention, detection and red flags of fraud will also be discussed.
- Rules and Regulations
This section provides a basic overview of the current Federal Income Tax requirements, and the definition of a lease for legal contracts. The differences between the legal and tax requirements will be discussed. Sales tax, property tax and other accessed taxes will also be investigated.
- Types of Leases
The various types of leases and their purposes are explained, and in particular, how each complies or fails the requirements of the different legal, tax and accounting rules. The structure of each type of lease will be presented along with sample pricing to reflect each structure. Participants will be placed in groups to structure and price each type of lease and to discuss the advantages and benefits of each lease type. End of the lease options will also be discussed.
- Types of Leasing Companies
The variations and requirements for different types of leasing companies are discussed to explain advantages and disadvantages of each.
- Types of Lease Programs
Some sample lease programs are discussed to show how specific arrangements for vendors or equipment types can organize a leasing activity. Unique programs that fit a specific need of the lessee (e.g., seasonality of revenue stream or expense control), are also presented.
- Documenting an Equipment Lease
The range and purpose of the documents required in a sample lease transaction are reviewed. Participants discuss the contents of a lease agreement by taking either the lessee's point of view or the lessor's point of view to determine the purpose and meaning of the major requirements of the lease.
- Credit Philosophy and Marketing Strategy
The integration of credit philosophy and marketing strategy with emphasis upon cooperation between sales and credit, objectives, approaches and benefits is discussed.
- Benefits of Leasing
Why is leasing attractive to many companies? What are the tax, legal and accounting benefits of leasing? Why is "net-after-tax-cost" important? How does obsolescence impact a decision to lease vs. purchase?
- Lease Type, Collateral and Repayment Schedules
Learn how to match the lease type and repayment schedule with the lessee's needs and their sources of repayment. Understand how to distinguish a true lease from a capital lease. Understand how collateral provides a means of eventual repayment and mitigates credit loss.
- Accounting Classification Requirements for the Lessee
The rules on how to classify a lease for the lessee, with the impact on expenses and earnings, are presented to help participants understand how the accounting requirements affect the type of leases and the structure of each lease. The differences of income and expense for accounting vs. federal income tax are also discussed.
A 60-question test will be administrated and reviewed on the last morning. The test provides a review of all the principles presented during the workshop.
Please note: in order to receive a certificate of completion for this workshop, attendees are required to complete this test and the workshop evaluation form.