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- An operating lease in which the lessee has the right to buy the leased asset at the end of the lease term for 10% of the original purchase price.[...]
- An operating lease that requires the lessee to purchase the equipment for 10% of its original purchase price, it being an obligation of the lessee rat[...]Back to Top ↑
- 2
- Abbreviation for asset-backed security
A depreciation method that allocates and expenses the cost of a tangible fixed asset in decreasing amounts in each succeeding accounting period over t[...]
The act of receiving an asset from its supplier whereby the lessee uses a certificate of acceptance to acknowledge that the asset it received is prope[...]
The periodic allocation of the cost of a tangible asset over its estimated economic life and reduction of the asset’s carrying value in accordance w[...]
Abbreviation for aircraft, crew, maintenance and insurance
Any action that subjects an individual or entity to be proceeded against involuntarily as a bankrupt or for which the person could be adjudged bankrup[...]
An up-front fee the leasing company charges the lessee for lease-related administration costs.[...]
A certificate granted by a national aviation authority (NAA) authorizing an aircraft operator to use aircraft for specified commercial purposes.[...]
Variation of wet lease
Abbreviation for asset-liability management
A system for taxing individuals and corporations that effectively prevents taxpayers from reducing their tax below a certain level, where the taxpayer[...]
Variation of amortization schedule
1. The reduction of a limited-life asset’s value as a result of the passage of time or its use in the production of goods and services through the a[...]
A table in a lease agreement that sets forth the leased asset's purchase value, the lease value, the monthly installments, repayment dates, lease fees[...]
Abbreviation for alternative minimum tax
1. The annualized nominal rate without intraperiod compounding, equal to the periodic nominal rate times the number of compounding periods for a year.[...]
Abbreviation for air operator certificate
A combined lease and credit application process in which a lessor reviews and grants credit using the information submitted on leasing applications, a[...]
An up-front fee charged for the processing of a lease application.[...]
Abbreviation for annual percentage rate
The primary source of guidance issued by the US Financial Accounting Standards Board (FASB) on the accounting for leases by lessors and lessees, which[...]
The leasing accounting standard issued by the US Financial Accounting Standards Board (FASB) and effective as of 15 December 2018 that requires public[...]
An account that changes the carrying value of the asset to which it relates, including accumulated depreciation and allowance account for loan and lea[...]
The creation and issuance of marketable debt securities either through true-sale securitization or synthetic securitization.[...]
A marketable security that is issued by a special purpose vehicle (SPV) that buys financial receivables, such as automotive leases and consumer loans,[...]
The coordinated management of the interest rate, liquidity and market-price risks inherent in a financial institution for the general purpose of earni[...]
A lease assigned by the lessor (assignor) to a funding source (assignee) in exchange for an upfront cash funds.[...]
The party to whom rights in a contractual arrangement and/or an asset have been transferred and assigned.[...]
The sale of a financing arrangement (e.g., a loan or lease) in which the rights to payments (not any obligations) of the financing are transferred to [...]
The party that transfers and assigns some or all of its rights in a contractual arrangement and/or an asset to another party to secure the funding pro[...]
A perfected lien, which makes the security interest in property complete and legally enforceable as of the date it is perfected, it encumbering real a[...]
An injunction that arises upon the filing of a bankruptcy petition that halts actions by creditors, with certain exceptions, to collect debts from a b[...]
- A lease transaction in which a lease funder makes a nonrecourse loan to the lease originator after inception of the lease that is secured by the colla[...]
- A party designated to act as the servicer in a securitization transaction in the event of the original servicer’s failure to perform or insolvency i[...]
- A lease payment structure that provides for level periodic payments that are relatively low during the lease term and a relatively large final rental [...]
- A bank or bank affiliate that offers leasing as part of its product mix through its regular lending units, a special leasing unit within the bank, a s[...]
An individual or entity that is formally deemed unable to satisfy its financial obligations to creditors and that has been judged legally insolvent th[...]
A nontechnical term for a legal state of insolvency.[...]
The lease of a marine vessel (ship, boat) where the vessel's legal, registered owner (lessor) transfers its possession, use, control to the bareboat c[...]
The lease payment for a bareboat charter of a specified amount, usually per day and payable monthly in advance by the demise charterer to the legal an[...]
The party that takes the place of the legal, registered owner (lessor) of a maritime vessel and becomes responsible for crewing, maintenance, operatio[...]
The contractual right of a lessee to purchase the leased asset at a fixed price that is substantially below its expected fair value when the option be[...]
The The lessee’s contractual right to extend a finance lease beyond its basic lease term for rental payments substantially below the asset’s expec[...]
The noncancellable lease term where a renewal option is found in a finance lease arrangement, during which the lessor expects to recover the asset cos[...]
One hundredth of one percent (0.01%).[...]
1. The possibility that a change in interest rate will cause a change in the yield on different rate-sensitive assets, liabilities and off-balance she[...]
Abbreviation for Bureau of Economic Analysis
Referring to a relatively low-volume, high-value assets, costing in excess of $500,000 according to DBRS and Fitch and more than $5mn according to ELF[...]
Equipment that costs in excess of $500,000 according to DBRS and Fitch and more than $5mn according to ELFA, such as aircraft, ships and large industr[...]
The lease financing of low-volume, high-value assets, such as aircraft, ships, telecommunications equipment and large industrial plants, arranged unde[...]
A document that evidences the transfer of title to an asset from the seller to the buyer upon payment, subject to the terms of a purchase order or ass[...]
Each hour or part thereof elapsing from the moment when the chocks are removed from the wheels of an aircraft until the chocks are next again returned[...]
The percentage of the cost of qualifying assets (most types of tangible personal property and acquired computer software) that the IRS allows a busine[...]
Abbreviation for basis point
Abbreviation for bargain-purchase option
The failure of a contractual party to perform in accordance with the terms and conditions of an agreement.[...]
A clear, simple and objective standard comprised of objective criteria that can be applied to judge a situation and used to resolve ambiguous issues i[...]
Abbreviation for bargain-renewal option
Structured financing that, similar in design to securitization, allows lessors to borrow against the future cash flow of their funded lease portfolio [...]
An agency of the US Department of Commerce that is responsible for collecting and publishing economic data, including the national income and product [...]
The guarantee of a vendor to buy back its leased equipment from the lessor upon lease termination, which reduces the lessor’s resale and residual va[...]
- Variation of cancellable lease
- Generally an operating lease (rental) that may be terminated by either the lessee or the lessor without penalty.[...]
- The amount of capital in relation to risk weighted assets required by regulatory authorities that financial institutions must hold to ensure their abi[...]
Manufactured resources that are used in economic activity to produce goods and services.[...]
capital lease
GAAP
Variation of finance lease
The cost of the funds (interest) used to finance self-constructed long-term assets, which results in an increase in the total amount of fixed assets a[...]
The recognition of the total interest incurred by the lessor on progress payments made to a manufacturer or constructor until the asset’s delivery b[...]
A division, subsidiary or joint venture established with a leasing company by a vendor (manufacturer or dealer) with the primary purpose of providing [...]
The original historical cost of an asset less the total amount of depreciation or amortization accumulated on the asset less the total of any asset im[...]
The damage, destruction or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual, where a "sudden event" is one[...]
Abbreviation for collateralized debt obligation
The document signed by the lessee acknowledging that the leased asset has been received by the lessee, that the lessee accepts the asset in its receiv[...]
A document certifying appropriate insurance coverage of a leased asset.[...]
charge
BE
Variation of lien
The reduction of a loan or lease and increase in the allowance for loan and lease losses (ALLL) by the amount of the impairment.[...]
A mortgage that provides a security interest in tangible personal property (chattel) to secure the financing of such as assets as equipment and fixtur[...]
A record that evidences both a monetary obligation and a security interest in specific personal property (goods), in the software or license of softwa[...]
The highest quality of commercial office space or building available for lease.[...]
The second highest quality of office space or buildings available in the commercial real estate lease market.[...]
Suboptimal office space or buildings for rent, usually because the property is relatively dated compared to newer or recently refurbished property or [...]
A motion or petition filed with the appropriate court or authority that seeks the return of assets that were fraudulently transferred.[...]
A lease that does not contain a purchase or renewal option, it requiring the lessor to take possession of the asset at the end of the lease term, ther[...]
The satisfaction of all obligor conditions precedent (CPs) to a financing agreement, as of when financing parties are obligated to make the financing [...]
Abbreviation for cost of capital
Abbreviation for cost of goods sold
A specific asset or group of assets (personal or real property) that has been pledged or title to which has been assigned by a debtor (borrower, issue[...]
The analysis of the ability of collateral to support a loan and the collateral proceeds to satisfy any remaining loan obligations.[...]
The transfer of the rights to the rental payments from and a security interest in a leased asset by the asset’s owner and lessor to the lease funder[...]
The cash arising from disposition of collateral and the rights and certain claims against the collateral, first against expenses resulting from the co[...]
A structured pay-through security created by a special purpose vehicle (SPV) that buys an originator’s receivables or other financial assets that se[...]
A guarantee that generally cannot be enforced until the beneficiary of the guarantee has obtained and sought to enforce a judgment against the debtor [...]
Any land or building used for commercial purposes, generally encompassing any real property other than a single-family residence or a residential lot,[...]
A nonrefundable fee required by the lessor at the time a lessee accepts a commitment in order for the lessor to allocate the funds required for the le[...]
A document prepared by the lessor and presented to the lessee that sets forth the lessor’s commitment to provide the proposed lease, it generally pr[...]
The purchaser of the asset in a conditional sale transaction, who has the right to possess and use the asset while making the installment payments.[...]
The sale of an asset with the financing manufacturer, bank or finance company withholding title to the asset from the buyer the until all payment for [...]
The seller of an asset in a conditional sale transaction.[...]
The seller of the asset, typically also the asset’s vendor, in a conditional sale transaction, who purchases and finances the asset.[...]
A lien that is assigned voluntarily, such as a mortgage in real estate.[...]
A fraudulent act that occurs when a party transfers property in exchange for less than its reasonably equivalent value, such that the value of the par[...]
An individual who buys a good or service for personal use and not for resale or use in production and manufacturing.[...]
A commodity, such as a motor vehicle, that is purchased and owned by a consumer and used repeatedly or continuously over a prolonged period.[...]
Any good that is used or bought for use primarily for personal, family or household purposes.[...]
A lease payment that is not fixed in amount, it depending instead on the occurrence of some specified event other than simply the passage of time.[...]
Variation of rental
The cost of funds used to finance a business or a transaction – both the cost of equity and the cost of debt.[...]
1. In manufacturing, the cost of goods purchased, raw materials, overhead and labor that can be directly related allocated to the production of goods [...]
Abbreviation for credit rating agency
Abbreviation for commercial real estate
A bookkeeping entry that affects the right side of all accounts, it decreasing asset and expense accounts and increasing liability, equity and revenue[...]
Any process used for assessing the credit quality of a counterparty through the analytical study of financial statements and other data, including pay[...]
A form submitted to a prospective lender or lessor that provides credit information on prospective borrower or lessee, respectively – and occasional[...]
An independent agency that researches, collects, analyses and organizes credit information primarily on consumers and small businesses (SMEs) and main[...]
A method or instrument used to improve of the credit profile of a structured financial product or transaction in the form of an internal or external c[...]
A party that improves the credit rating of an asset-backed security (ABS) above that of the underlying assets.[...]
The total amount of credit that a financial institution has extended and risks losing if the debt is not repaid.[...]
A credit model used to determine credit losses that have or will probably arise from a credit portfolio in order to calculate the allowance for loan a[...]
An analytical method that models the credit default process based on available information used to determine the probability of default on a credit ar[...]
An independent company that evaluates and quantifies the credit risk of banks, nonbank corporations and local and national entities as well as their p[...]
The possibility (risk) of financial loss of a creditor (lender, lessor, supplier) arising from the failure of a debtor (borrower, lessee, customer) to[...]
The management of the overall credit risk of a financial institution consistent with its risk appetite, policies and business objectives.[...]
The process of determining the creditworthiness and forecasting future performance of existing or prospective consumer and SME borrowers or lessees th[...]
A largely statistical regression model that quantifies and shows the degree of the probability of the default of a credit applicant on a credit transa[...]
A method of financing real estate usually structured as nonrecourse debt whereby a landlord obtains financing of rental property secured by assignment[...]
Abbreviation for credit risk management
A guarantee of a subsidiary company's debt by another subsidiary (affiliate-to-affiliate).[...]
Abbreviation for credit scoring system
Abbreviation for credit tenant lease
The impairment loss model for the recognition and measurement of the allowance for loan and lease losses (ALLL) requiring an entity to estimate the ex[...]
A credit scoring system that typically utilizes both credit bureau data and other data from a credit application and is developed by the creditor (len[...]
- Abbreviation for delivery and acceptance
An aircraft lease where the asset owner provides the aircraft and its maintenance and insurance to the aircraft operator, but without cabin crew.[...]
The date when the lessee accepts an asset as delivered for the purpose under the lease, which is when its lease obligations are fully binding without [...]
The fourth-largest global credit rating agency (CRA) based in Toronto, Canada, with approximately 3% of global market share.[...]
Abbreviation for double-declining-balance method
A bookkeeping entry that affects the left side of ledger T-accounts, it increasing asset and expense accounts and decreasing liability, owners’ equi[...]
A third-party institutional investor (bank, insurance company, pension fund) unaffiliated with the lessor or lessee that lends the long-term debt fund[...]
The amount of nonrecourse secured debt funding provided by debt participants (lenders) in a leveraged lease comprising 60% to 80% of the total funding[...]
A ratio of net operating income to annual debt service, which indicates how many times a firm is able to service its debt of earnings before interest [...]
An individual, firm, government, company or other legal person that owes to another party money or some other obligation to perform and that arises in[...]
A breach of contract that would be an event of default if a grace period elapses, a notice of default is given or a determination of default is made.[...]
The actions permitted by a contract and applicable law that a party may take to protect and recover its property interests in the event of default of [...]
Lease payment that is due after a rent-free grace period and used for assets that do not generate revenue or cost savings until after they have been f[...]
Tax due for payment in future years as a result of timing differences when different depreciation methods are used for financial reporting and tax pur[...]
A balance sheet account showing the amount of taxes overpaid or paid in advance and are often created due to taxes paid or carried forward but not yet[...]
A balance sheet liability account showing the estimated amount of taxes on income earned and recognized for accounting purposes (book income) but not [...]
The legally recognized transfer of possession (receipt) of an asset.[...]
The event in which a lessee agrees that the asset it received is proper and acceptable for the contractual purpose of a lease and that its lease oblig[...]
The exhaustion of a natural resource, such as mineral deposits, standing timber or oil, through mining, cutting, pumping or other extraction, and the [...]
An intermediate bankruptcy-remote special purpose vehicle (SPV) created by a securitization transaction’s sponsor in a two-step securitization that [...]
The periodic allocation of the cost of a tangible asset (property, plant and equipment) other than land and natural resources with the corresponding r[...]
That portion of the historical cost or other cost base of a tangible fixed asset that is charged (expensed) against the earnings and credited to accum[...]
Variation of cancellable lease
Abbreviation for direct-financing lease
A two-party transaction that involves an equipment supplier/vendor (manufacturer, dealer or retailer) and the asset’s user (lessee), whereby the equ[...]
A finance lease arrangement between a lessee and a lessor that is not the manufacturer or dealer of the leased asset, whereby the lessor acquires the [...]
1. The interest rate at which expected future cash flows are discounted in the process of computing the present value of a financial instrument.2. The[...]
The process of computing present value.[...]
The assignment of the rental stream at the discounted present value of the lease payments and the grant of a security interest in leased equipment to [...]
A full-payout lease that contains a bargain purchase option of $1 to buy the leased asset at the end of the lease term.[...]
An accelerated depreciation/amortization method that doubles the percentage of the straight-line method by which the cost of an asset is expense each [...]
The guarantee of a subsidiary’s debt by its parent company (parent-to-subsidiary).[...]
Abbreviation for discount rate
1. The date specified in a commitment letter on which the commitment will terminate if a particular condition has not been satisfied or, in acquisitio[...]
A leasing arrangement in which the owner of an aircraft transfers to the lessee and aircraft operator possession of the aircraft for a specified perio[...]
Abbreviation for debt-service coverage ratio
- Abbreviation for exposure at default
The termination of a lease before the scheduled end of its contractual lease term.[...]
A charge set at lease inception levied against the lessee in the event of early lease termination to assure recovery of the lessor’s remaining inves[...]
An option giving a lessee the contractual right to buy the leased asset for a fixed amount at one or more points in time prior to the final scheduled [...]
The contractual right of a lessee to terminate a lease and surrender – not purchase – the leased asset upon payment of the balance due, including [...]
Abbreviation for early-buyout option
The period of time over which an asset is expected to be profitably used in its intended role, which is limited by changing factors of obsolescence an[...]
A technique for calculating and amortizing the cost of a financial instrument by allocating the interest income or expense at a constant periodic rate[...]
Abbreviation for effective interest method
Abbreviation for expected loss
Abbreviation for equipment leasing company
An electronic document over which a security interest can be granted under Article 9 of the US Unified Commercial Code (UCC).[...]
Abbreviation for Equipment Leasing and Finance Association
Abbreviation for Equipment Leasing & Finance Foundation
A right to or interest in property and payments that burdens the clarity of good title to the property, including security interests in real or person[...]
The right of the lessee in a noncancellable finance lease to purchase or continue using a leased asset at the end of the lease term as specified in th[...]
A first lease payment comprised of more than one advance lease payment, with the resulting "rental holiday” equaling the amount of the advance payme[...]
Abbreviation for end-of-term option
1. Any tangible movable asset (personal property) that is repeatedly or continuously used in economic activity in the production of goods and services[...]
A contractual arrangement whereby one party possesses and uses equipment owned by another party for a specified period of time, in the form of either [...]
The external financing of equipment that is owned by the lessor but possessed and used by the lessee generally for a significant part of the asset’s[...]
A US-based "501c3 non-profit organization dedicated to inspiring thoughtful innovation and contributing to the betterment of the equipment leasing and[...]
A US-based trade association that represents financial services companies and manufacturers in the US equipment finance sector, with the mission to pr[...]
Any financial institution conducting as its principal business activity the leasing of equipment.[...]
The grouping and classification of equipment sales or financing transactions into subgroups based on type of equipment, the cost of the underlying ass[...]
The possession and use of equipment by one party that is owned by another party for a rental period that is usually significantly shorter than the ass[...]
The possession and use of equipment by one party that is owned by another party for a rental period that is generally substantially shorter than the e[...]
A transaction in which the owner of equipment that has significant remaining economic life sells the asset under the agreement to simultaneously lease[...]
The taking out a lease for new equipment by a lessee either at termination of the original lease or prior its termination date, often on favorable ter[...]
A party in a leveraged lease that as owner of the leased asset holds beneficial interest in the asset and has the risk, rewards and full tax benefits [...]
The funding in a leveraged lease that is provided by the equity participants ranging from 20% to 40% of the investment in the leased asset, it equalin[...]
Abbreviation for early-termination option
The legal requirement of the contractual parties to a transaction to perform all obligations that they have not yet fully performed, whereby failure o[...]
Ownership-type operating cost, such as insurance, maintenance and taxes, incurred for leased asset pertaining to the current period.[...]
The amount that a creditor (lender, lessor) can expect on a credit exposure equal to the exposure less the value of the collateral in the event of def[...]
A credit loss model used to estimate the amount of impairment loss an entity expects and recognizes on its credit exposures from credit events over a [...]
The potential financial loss due to the occurrence of an adverse event.[...]
The amount of financial risk that a creditor (bank, leasing company) is exposed to at the moment the debtor goes into default equal to the unamortized[...]
A charge paid by the lessee for the lessor's forgiving a monthly rent in return for the lessee’s commitment to pay it at a later date.[...]
Credit enhancement in a securitization that comes from a third party, such a letter of credit, surety bond, wrapped security, or cash collateral accou[...]